How to Close The Fiscal Year in Great Plains
The Year-End Close is like the Super Bowl for accountants: You put in the reps doing the heavy lifting.
You tackled Month-End Closes.
You intercepted incorrect journal entries before they were posted to the general ledger.
And you blitzed the balance sheet reconciliations.
Now it’s time for your victory celebration.
And we’ve got you covered with the steps you need to take to get your fiscal year closed in Great Plains (GP).
The Microsoft ERP arena
If you’ve been an accountant long enough, you know that Great Plains is one of the O.G. ERPs. It’s been around since the early 1980s and was founded in North Dakota. Hence the name – Great Plains.
Microsoft purchased the Great Plains software in 2001. Throughout its 40-year history, Great Plains has gone through numerous iterations and names. The current version is Microsoft Dynamics GP, version 18.4.
Steps to closing the fiscal year in Great Plains
Year-End Close is the time to usher in a new fiscal year. What could be more exciting?
Great Plains requires a specific order for the year-end closing routine. And we’ll get to that in a bit.
But the first thing you must do before you start working in Great Plains is to have all the balance sheet accounts reconciled and adjusting entries posted. While you can post a post-closing journal entry, having your recs finalized for the current year makes sense.
Next, ensure your software has the current year-end update(s) that Microsoft typically releases in October.
Now you’re ready to dive into the Year-End Close process in GP.
Step 1: Generate a backup and run Check Links
Before you start on the hard close for year-end, make a backup file. This way, you’ll be able to get back to your starting point if there are any glitches during the Close process.
With your backup completed, you’ll start by running the Check Links command.
Click: GP > Maintenance > Check links
Before you begin closing modules, you’ll want to check the data integrity of your GP file. The Check Links functionality will automatically fix records or errors. If not, it will generate a list of issues.
Three key points to know about running the Check Links function:
- You’ll need to have System Security access for your username. Without access to the entire system, you can’t run Check Links.
- All other users must be logged out of Great Plains.
- It is time-consuming. It’s best to run this at the end of the day and let it run overnight.
Step 2: Confirm all prior fiscal periods are closed
After Check Links is completed, you want to ensure all months for the current year have been closed in Great Plains.
Any open fiscal periods will prevent the year from being closed.
Step 3: Create the new fiscal year
Great Plains can be fickle. If you close the current year without creating the new fiscal year, you’ll make a Mount Everest pile of work for yourself.
Closing fast is the name of the game. Avoid this roadblock, and be sure to set up the new year before you close this year.
Click: GP > Tools > Setup > Company > Fiscal period
Step 4: Close individual modules
There’s a required order to follow when closing Great Plains modules since some have dependencies that rely on other modules closing before they can be closed. Going out of order is not advised.
The steps are:
- Reconcile your sales order processing (since this will impact accounts receivable)
- Reconcile your purchase order processing (since this will affect inventory and fixed assets)
- Close Payroll module (if you use it for your company)
- Close Inventory module
- Take a physical inventory count
- Reconcile to your inventory listing
- Make adjusting entries as needed
- Consider removing discontinued items
- Update your pricing
- Close Receivable module
- Close Payables module
- Close Fixed Assets module
- Close Analytical Accounting module
- Close Project Accounting module (this one can be quirky, so have patience)
- Close GL
- Before you close the GL, check the posting type for all your GL accounts. Balance sheet accounts should be marked as such, and income statement accounts marked as income statement. This will ensure that all income statement accounts will close to your retained earnings account.
Step 5: Print GL closing report
With each module closing, Great Plains prompts you to print a closing report. You might think you should, but print at your peril.
Some closing reports will be thousands of pages long and aren’t necessary for your audit trail.
The only closing report that you should print is the general ledger closing report. It shows all the income statement accounts that were closed to retained earnings.
Keep in mind that a few modules don’t require closing because they don’t directly interact with the GL. Those include:
- Sales order processing
- Purchase order processing
- Bank reconciliations
- Human resources
- Project accounting
- Service call management
With your current year modules closed and your new fiscal year created, you’re ready to create your financial statements.
One last thing you should do before you’re ready to move onto the new year is to check that the year you just closed was closed.
Visit the fiscal period set-up window and ensure there’s a tick mark in the checkbox next to historical year. This confirms that Great Plains closed the year correctly, and there were no hiccups.