Fiscal year-end procedures are basically the same as those for closing an accounting period, except for some additional steps. Many companies never actually close the last period of the year. Instead, they leave it open so they can run reports and make audit adjustments. If you do this, you should also adjust the Entry Edit Status of all transaction screens for this period to prevent unauthorized entry. Leaving this final period open lets you complete adjustments at any time.
One of the main differences between closing a regular accounting period and closing a fiscal year is that most companies adjust revenue to actual in the last period of the fiscal year. When a company has been posting revenue at target rates with variances during the fiscal year, posting revenue at actual rates clears all variance accounts. All revenue is then calculated at actual rates and compared to actual expenses. The only exception to this occurs if you use an "F" (Fixed) ceiling code rate in the C/O/F column in the Project Burden Cost Ceilings screen in Costpoint Project Setup. This is a fixed rate that is used regardless of the rate method used in closing.
Please note that this list of fiscal year-end procedures does not include any procedures for Costpoint add-on modules. Refer to the documentation for the individual add-ons for information on those modules.
This Special Topic is divided into the following categories:
Timing
Additional Procedures
Checklist for Post-Closing Procedures
Other Issues
As with any other accounting period of the year, you can continue to process transactions for the next fiscal year. The proper time to begin closing procedures for the fiscal year is after you have completed the steps for closing an accounting period. (This special topic assumes that you have already completed the accounting period closing procedures. Please see Special Topic GL-6, "Closing the Accounting Period," for information on the accounting period closing process.) It is best to complete your year-end adjustments as close to the end of the fiscal year as possible. This will produce more accurate financial statements in the new year.
In addition to your regular period-end procedures, you should follow these steps before closing the fiscal year.
You should complete all reconciliations listed in Special Topic GL-6, "Closing the Accounting Period." It is particularly important to reconcile the project ledger to the General Ledger. Otherwise, contract-to-date costs will not be stated properly on the project reports when project balances are rolled forward. A couple of toolkits (listed below) can assist you in this process.
This toolkit (in the Miscellaneous Toolkits screen in Costpoint Cost and Revenue Processing) will compare amounts in the GL_POST_SUM tables to those in the PROJ_SUM table. The Compute Burden process updates the Project Ledger with amounts from the General Ledger. If amounts are booked to the General Ledger after the Compute Burden process has already been run, the PROJ_SUM table will not contain the new data unless you rerun the Compute Burden process. The PROJ_SUM table determines what is rolled forward to the new year during the fiscal year closing process. The PROJ_SUM table amounts must be properly stated before the roll-forward is done. This toolkit can help account for differences.
This utility (in the Miscellaneous Toolkits screen in Costpoint Cost and Revenue Processing) will compare the ALLOC_APPLIC table to the PROJ_BURD_SUM table to see if any amounts are being improperly burdened in the PROJ_BURD_SUM table. The ALLOC_APPLIC table contains a "map" of the current pool structure. This toolkit reviews that structure and determines whether there is improper burdening in the PROJ_BURD_SUM table. The PROJ_BURD_SUM table also is rolled forward to the next fiscal year and becomes the basis for contract-to-date information. The PROJ_BURD_SUM table amounts must be properly stated before the roll-forward is done. If a problem is found by this toolkit, you can run the Fix Invalid Pools in Project Ledger Utility to correct the problem.
Perform a complete backup of the database and the applications before any of the balances are rolled forward. Keep this backup until you are sure that the roll-forward process has gone as planned.
It is important to run a Trial balance at this point so you can compare the ending balances this year to the beginning balances after the balances have been rolled forward.
At this point, you should run any G/L Detail reports that you need in hard copy for your files. Although you can run these reports at any time, it may be helpful to run a preliminary report before rolling balances forward.
At this point, you can roll the G/L balances forward. Use the Update G/L Beginning Balances screen to roll the balances forward based on the Account Type selected in the Maintain Accounts screen. Any account with an Account Type of "Asset," "Liability," or "Stockholders' Equity" will have its balance rolled forward to the beginning balance for the next fiscal year. When more than one company has been established within the Costpoint database, this Update G/L Beginning Balances process must be completed separately for each company.
You should compare these reports to make sure that your roll-forward has gone as you've planned. You should make this assessment immediately after the roll-forward has taken place, so that you can correct and repeat it, if necessary, before performing additional steps. You may want to consider also running a balance sheet for comparison with the previous year's balance sheet.
If you are using a "Current Year Retained Earnings" account, you must zero out the beginning balance for the "Current Year Retained Earnings" account and add that amount to the "Prior Year Retained Earnings" account. Use the Maintain Non-Project Beginning Balances screen to update these balances. Thus, when you begin your new fiscal year, you can show the income or loss for only the current year under the Current Year Retained Earnings line on the financial statements.
When more than one company has been established in the Costpoint database, all Retained Earnings updates should be made in Company 1.
Each row in the Project Ledger has an account function code that gives the program information about how to treat that cost. This utility (in the Miscellaneous Toolkits screen in Costpoint Cost and Revenue Processing) goes into the project ledger and ensures that each row has an account function code and that the code is correct. Without this account function code, the project balances will not roll forward properly.
You are now ready to run the Update Prior Year History screen in Costpoint Project Setup. This process takes information from the PROJ_SUM and PROJ_BURD_SUM tables and inserts it into the PSR_PY_SUM and PSR_PY_BURD_SUM tables. These costs will now form the basis for the contract-to-date costs. If all the utilities listed above have been run, the balances that come forward should be correct.
These PSRs and report tables should be run after your year-end closing to create a reference. These figures will be used in Step 13.
You should now compare the "contract-to-date" columns on the Project Status Reports and Revenue Summaries that were run at the end of the prior fiscal year to the "prior year" columns on the current year's PSRs and Revenue Summaries. If the amounts are different, try running the Assign Account Function Codes utility again (Step 10) to make sure that all accounts have codes. After you have done this, you will need to return to Step 12 to roll the project balances forward again.
Perform the following procedures before you begin processing in the new fiscal year.
You must complete these steps before doing any processing in the new year. You may already have set up this information, in which case you can skip this step. You may want to check that the Entry Edit Status for your transaction screens is set to ""O" (Open) so that you can begin processing.
You must update the Allocation Groups Number field to "1" in the Allocation Groups screen in Costpoint Cost and Revenue Processing to reflect pool structure changes in order to calculate indirect rates in the new fiscal year. You must perform this step before you can clone your pools.
You must now clone all pools so that you can calculate indirect rates in the new fiscal year. Keep in mind that you should clone the first screen of the cost pool (the Cost Pools screen in Costpoint Cost and Revenue Processing) and use the Save/Continue option in the File menu to clone the subtasks. Not doing so will result in partially cloned pools. However, you should generally NOT clone the Pool Rates subtask, because rates are usually different between fiscal years. You'll set up your pool rates in Step 4. Refer to the documentation on the Cost Pools screen for more detailed information on cloning pools.
You should not have cloned this subtask (in the Cost Pools screen in Costpoint Cost and Revenue Processing) in the previous step because the rates will be different in the new year. For the new cost pools that you just created in Step 3, enter the target and provisional rates for the new fiscal year.
If you have costs incurred in a prior year that need to be billed in the current year, the program will apply the correct provisional rates based on the year in which the costs were incurred. If you wish to bill these costs on the same invoice, they will be properly burdened. You may, however, wish to bill them separately so that the rates applied can be easily determined. Retroactive billings for rate revision purposes are available in Costpoint Billing.
Clone your burden ceilings and overrides in the Project Burden Cost Ceilings screen in Costpoint Project Setup. Because these records are tied to a specific fiscal year, you need to set up a new fiscal year for each project, as necessary, and add the new fiscal year's ceiling/override data.
Check your billing formats (the Generic Billing Formats screen in Costpoint Billing) to see whether you have listed any fiscal years in the Accounts subtask. If you have, you need to add new lines with the new fiscal year. You can leave the Fiscal Year column in this subtask blank to include all fiscal years, so your closing process may not require this step.
At this point, you may want to enter new budgets and choose a new default budget revision for purposes of printing project reports.
If you are planning to make any structural changes to your system setup, you must address some timing issues. For example, if you are changing project account groups, owning organizations for projects, revenue levels or formulas, or organization structures, you should not make these changes until you have computed the final revenue for the fiscal year being closed. Making changes at the wrong time could result in incorrect calculations in the current fiscal year.
There are many other things to think about when making these types of critical structural changes. You should always call Costpoint General Support before making any such changes.