At various times, you will close fiscal periods (months) and fiscal years. The General Ledger program closes fiscal periods and years per fund. Closing a period or year for a fund means you can no longer add, edit, or approve any transactions for that period or year for that fund. When you close a fiscal period for a fund, you prevent any more transactions from being entered in that period for that fund. General Ledger automatically closes all prior periods that are not already closed.
Hint: You can close some funds while leaving other funds open for the same periods or years. Different funds can also end their fiscal years at different times.
You should close fiscal periods on a regular basis, but the General Ledger program gives you great flexibility in choosing when to do this. The program requires only that you close all of a fund’s periods for a fiscal year before you can close that year for that fund. All of your financial statements will report correctly, based on transaction dates, regardless of whether the corresponding periods are open or closed.
When you close a fiscal year for a fund, General Ledger transfers the balances of most of the fund’s revenue and expenditure accounts to your retained earnings account, setting the revenue and expenditure accounts to zero balances. This is because revenue and expenditures are always reported for a period of time. The fund will start the new fiscal year with zero revenue and expenditures.
General Ledger uses closing entries to consolidate the current balances of the revenue and expenditure accounts into retained earnings, which is your closing account.
Hint: Almost all revenue and expenditure accounts close to retained earnings at the end of each fiscal year. Some funds, however, may have special revenue or expenditure accounts that do not close to retained earnings.
As a matter of policy, most agencies close a fiscal year for a fund before their auditors review the records for that year, although the General Ledger program itself does not require it. The program requires only that you close a fund’s fiscal year before you can close any fiscal period in the next fiscal year for that fund.
During the closing process for a fiscal year, you will generate and verify that year’s final financial statements. (If necessary, you will make correcting journal entries and then re-run the final statements.) You will then close any open fiscal periods for the year. Next, you will generate closing entries to consolidate the balances of most of the fund’s revenue and expenditure accounts into your retained earnings account. This allows the fund to begin the new fiscal year with zero revenue and expenditures. Finally, you will close the year itself.
After you have closed a fund’s fiscal year, you will open the next fiscal year. To do so, you will first prepare the program records General Ledger requires to support the new year. You will then open the fund’s new fiscal year for budgeting and, finally, for entering transactions.
Note: You can close a period in the new fiscal year as long as period 1-12 of the previous fiscal year are closed. Period 13 & 14 may remain open for the previous fiscal year while awaiting auditor adjusting entries.
General Ledger contains a wizard to walk you through each of these steps, except generating financial statements.
You can run each wizard for a single fund or for multiple funds at once. For any given fund, you should run the wizards in the same sequence as below:
Generating Fiscal Year Closing Entries
Opening Fiscal Years for Budgeting
Opening Fiscal Years for Posting
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