Top 5 things you need to know about preparing for year end




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Thank you for attending everyone. Just before we start, a few housekeeping rules. So all attendees will be on mute and remain for the whole webinar. Please use the question box to ask any questions related to the topic – all questions will be asked in up the demo. If we run out of time or if the answer needs a bit more time, then they’ll be answered offline directly. Use the chat box for any questions related to the webinar topics, or if you can’t hear us or if the present is going too fast.

Please note there will be a link to view the recording which will be sent to everybody after the demo. So this is the 22 in the series of monthly webinars and all key areas of Business Central NAV and Business Central. You can sign up for as many as you like on our website and I’ll show you the list of upcoming webinars at the end.

Okay, so, my name is Karen. I’ll be facilitating the demo today. I’m an account manager here at TVision and I’ve worked here for two years. My background is 19 years of software account management experience, working with ERP companies. Ian’s going to be doing the demo today and he’s a support consultant here at TVision. He’s been working for TVision for three years and has been using NAV since 2000.

So this webinar is all about preparing for year-end. And the reason why we’re doing it now is that we know your ends coming up and as it’s a manual process, it can be easily forgotten since last year. So maybe once you receive the recording for this webinar, you can save it as a good resource for future. It’s understandable that the year-end process is forgotten whilst being similar to the month in process. There are additional tasks that do need to be done. So the best way to approach year end is just to make sure that you do get your prep work done.

And then it really should be a simple process and you can follow the process using our how-to guide if you don’t have a copy of this just log of call with support and they’ll send you the how to guide for your version.

So here are the top five things that we’re going to show you about preparing for year-end. Firstly, make sure that you do your reconciliations and accruals first for all ledges including sales purchase, banking, inventory and VAT. Then, make sure that you do post all your adjustments such as corporate tax, fixed asset or evaluations and costing adjustment. A very important next step is to make sure that you take a backup and refresh your test environment.

And once you’ve done all the above steps, you can then close the fiscal year, such as you know: calendar set up, inventory periods, posting dates Etc. The final step is to close the income statement and then you can start reporting, and you’ll be in a position to do any consolidation if required. So before the demo, we would like to understand how long it currently takes you to do your year-end. I’m going to launch the poll now, so if you want my end mind to submit your answers, that will be great.

Okay, just distributing the poll now if you could put in the answers, that would be great.

Just giving everybody a little bit longer.


Just collecting the responses now.

Okay, so at the moment, it looks like it’s taking weeks for people to do their year-end. So that’s quite interesting. So now I’ll hand over to Ian for the demo. Like I said, if you do any questions, please submit them throughout the demo, but we will answer them at the end.

Hi guys. Thanks for joining us today for today’s demo. I’m not going to be doing much clicking on the screen. I’ll do a lot more talking. But when you do see me clicking, I’m using the latest version of Business Central, and this time I’m using the software as a service model. So this is hosted by Microsoft. It’s not a local version at all. But everything that I’m going to tell you, it does apply no matter which version of NAV, Navision or Business Central you’re using.

Whether you’re using a fancy web client or the role tailor client. It’s still all valid. So as Karen mentioned, before you even start posting your year-end on the system. You need to make sure that you’ve done any reconciliations, any accruals of needed to happen for your year-end. So your accrual sets an internal process. You just need to make sure that the process for your reconciliation – there are a few accounts, it’s not compulsory, but you really should have a looking just double check.

If you go to your chart of accounts – and you scroll down and you find your control accounts. So for this company, I would look at my bank accounts. These are the balances, and I’m looking at them as they stand right now. So remember put on your filters and filter your list to show you those values at year end. So everything up to and including for my company the year-end is the 31st of December.

Now you will notice some of the balance has changed. This column is showing me the balance at the 31st of December.

I need to make a note of these numbers for my bank control accounts, including my petty cash, my debtors, accounts receivable, inventory, if I keep inventory and my accounts payable. Take a note of those numbers, and then go and check to the sub ledgers. So for instance the accounts receivable – mine is showing 78,000 I would go and I would run the aged accounts receivable report.

And when I run that I would choose my filters appropriately. I choose my year end date. I’d make sure it’s printed in local currency. So it matches my general ledger. I’ve taken it at the high level view. I don’t need the details. I would preview that report and I would just make sure that the total at the bottom of the report is the same value as I’m seeing on my GL.

For my accounts payable, I’d go and run my aged accounts payable report for year-end date. Make sure that the numbers correct. And for my inventory, I’d run my aged inventory report for your year-end date and make sure that I’ve got the same value of inventory. If there are any differences, you need to investigate figure out what the differences are and correct them before proceeding on to your year end. Now I know if I’d run the report for this account, I would have seen a slight difference. I need to investigate figure out what’s gone wrong.

And one of the reasons I’m probably getting a difference, if I look at this account, I’m allowing people to post directly to a control account. So somebody posted something to my control account that didn’t go through the sub-ledger. I need to go find those entries, reverse them out and go and repost them correctly, and then when I’m finished, I should really turn off direct posting so that this doesn’t happen again next year.

The same thing for my other control accounts, please make sure there’s no direct posting to them.

Once you’ve checked those accounts, you’ve fixed up any discrepancies, your accruals and your reconciliations are done. You’re one step closer to getting your year-end done.

Your next step will be to look at any adjustments that you need to post for the year-end. So some companies you get corporate tax rebates – you want to post those. You might want to look at your fixed assets, particularly if you’ve got random buildings or shares and other companies, you might want to write up or write down the value of those assets at the end to reflect what they were actually worth.

And another good thing to check the VAT numbers that you’re seeing in your VAT control accounts. Make sure that they balance to what you submitted to HMRC. With making tax digital, that should be 100% correct, but it’s still always a good idea just to double-check.

So two steps down now we’ve done the recons and accruals. We’ve done any adjustments that we need to do.

I’m happy that now we can start processing year end. But before I do that, I want to go to my general ledger setup.

And within my general ledger setup, I want to make sure that I stop people posting back into 2019. So I will give a starting date of the 1st January 2020. Now, by default people can’t go and change those numbers that we have at year end.

And the second place I want to go and have a look is in user setup.

And in user setup, I want to make sure any of the users on my system, if they’ve got an override here that lets them post into 2019. I want to take that away. The only person who should be allowed to post into this closing financial year, is myself. So I’m going to give myself the ability to close in 2019, but nobody else.

So now I’m confident nobody’s going to fiddle with the numbers that I have. At this point, if you have an on-premise system, if you’re on Navision or NAV ask your IT department to make a backup of your system as it stands, so you’ve got a backup before you post your year end.

And at the same time, restore that back up into your test company – and there’s two reasons I ask you to do that. The first reason, it gives everybody else in the company a test system that they can use if there’s any functionality that they need to play with that has good data in it that’s worth using. If your test system is 5 years old, the data in there isn’t very useful for testing.

So this is a good opportunity to refresh that test for everybody, and also, you can go into your test system and you can run your year-end in test and see exactly what’s going to happen. You can convince yourself that everything is 100% correct before you come back to live, and you can post your year-end in live. So it serves two purposes and that’s a really good tip. Once you’ve done your back up and you may have played around in test to make sure everything’s hunky-dory. You’re now ready to do the two steps for closing your year end. So depending on which system you’re on, you need to go to slightly different screens.

The first thing we need to do is, we need to make sure that our calendar is set up for the following year and that we closed the year that we’re closing. On some systems this is called accounting periods, depending on your version, on this system, I can type in fiscal year and it takes me to accounting periods.

So find the one on your system.

And you can see on my system 2017 is closed, 2018, I have closed. And a new feature from NAV 2018 onwards it locks the dates. That means once it’s closed. Nobody can change the dates that periods start and end, and it also locks the starting period for the next financial year.

So if we’re closing 2019, we need to close the year. As soon as I said close the year, the system figures out what’s the last year that I need to close, and it says once it’s closed it cannot be opened again. Quite a scary message, but don’t worry once you say yes, you can still post things back into 2019 if you really have to. It just means that these dates can no longer be modified once that closed tick is on.

You can still modify dates for the upcoming years. So let’s pretend that I’ve closed 2019. I’m actually going to close 2018 on my system, and I close the financial year already. I couldn’t reopen it to close it again for you. I shouldn’t have gone out of there – the second step on the accounting periods or fiscal years.

Is to make sure that your following year is set up.

So by closing the old year, my calendar runs up until the end of 2020, I want to create the following year so that when January 1st 2021 comes, my calendar carries on working.

I’ll put it in my start date of the 01/01/2021, 12 periods of one month each, I’d say okay, and that would set up 2021 for me. And one final thing to look at, if your business uses inventory, go to your inventory periods.

My system doesn’t, but if you did, close your 2019 inventory periods, and that means any cost of sales postings that happen will happen in the New Year. Not in the old year.

My calendar is set up. That’s the first half of the year end close procedure done. The next step is to actually close my income statement – take all of these numbers from the profit and loss, or income accounts, and move them up to the balance sheet accounts. And again, that is one simple step.

You would go to close, income statement, if you search for closed financial year, close fiscal period you’ll get there as well.

The close income statement, you simply put in the parameters, what is the end date of the year I’m closing? I’m closing 2018.

When I run this, it’s going to create a journal for me. I’m telling it I want a general journal called default. I might have my own journal called Ian – in which case I’d say use Ian. I put in a document number that makes sense. I’m going to use something… year end 18 as my document number, and I choose my retained earnings account. That’s the account where you would bring everything up to, usually retained earnings in some systems – it might be called Owners Equity or shareholders capital or something like that.

But use your retained earnings account, and then decide do you want to post in detail or do you just want to post the balances? I would recommend choosing balance, and that gives you a summary for each GL account gets transferred up. If you see a detail, you end up with hundreds and hundreds of lines on your journal and it’s just harder to understand.

If you use business units, turn on the business units, and if you use Dimensions, you need to tell the system which Dimensions to post with as well. So most of our clients use at least two dimensions on their accounts. So choose those dimensions.

Don’t worry, if you make a mistake here, it doesn’t post anything. It just creates a journal for you to post and you can do this as many times as you want until you get it right. So it finished, let me go and have a look at my general journals.

And it might help if I spelt it properly.

So, in my general journals, here is the journal that it wants to post. And I’ve done this twice and I’ve got two journals here. Oh no, I’ve made a mistake. Not a problem.

All I need to do is just delete this journal.


All right, and I can rerun that close income statement again, as I said you can run it as many times as you need until you get it right.

Close income statement, I’ll leave those in I’ll just change that document number again.

And say, okay.

It’s created my journal again. I can go and have a look at that journal.

And there’s the journal that it wants to post with one transaction for each account and dimension combination. So 2018 wasn’t a very big year, but this is exactly what it’s going to post.

I can review this. I don’t have to post it immediately. Nothing’s going to change in my 2018-2019 years because I’ve stopped people posting. So I can spend a few hours analysing these numbers, make sure I’m happy, when I’m happy, I simply need to post this journal.

I’m going to go ahead and post.

Hope that everything…

Ahhh, I stopped myself posting in 2018 remember on the setup, so it stopped me posting it.

Let me go and fix that.

And I need to give myself everything including 2018.

That’s better.

And now I’ll post that journal.

Okay, I’m not going to fiddle around it still thinks I’m on an old posting date. I would post the journal and everything in my profit and loss accounts would be cleared out and would move up to my balance sheet accounts. At this point you’re now ready to do your financial reporting to present to your shareholders, your board, your auditors Etc. You can also do consolidations if you have any consolidated companies, you can bring them up now.

And there are any other steps that you might need because your business is unique, perhaps you’re a partnership and that number that it moved up to the retained earnings account. Maybe you want to split that amongst the four partners in the business. That’s an extra step that you would have to complete manually – make a note of those things that you have to do manually or extra steps that you have to take for your business. Keep them for next year, so that next year so you’ve got a checklist that you can go through, and you don’t have to get stuck and worry did I remember everything.

But that’s how simple and easy a year-end can be, as long as you’ve done that prep work at the beginning. It’s a simple matter of setting up the calendar, closing the old year, closing the income statement. It shouldn’t take you more than a few hours. Okay, that’s me done back to Karen. Okay. Thanks Ian.

So if anybody’s got any questions from the demo or something that we haven’t shown so far, if you could just submit them now using the question box and we’ll just give you a couple of minutes to do that.

Okay, I can see there’s one that’s just come in. What if you need to make an adjustment after completing the year end?

Okay, that’s actually not uncommon. So as long as you haven’t given these numbers to your auditors as long as you’re a pre-audit stage still, you can go back and post things into the year that you’ve closed. You just then have to rerun that close income statement routine. It will only find those open transactions that you just posted. It will not post everything again, you can post it and it will bring that one transaction from your profit and loss up to your ink up to your balance sheet.

And as I say, you can do that as many times as you need. The only time you can’t do it is when you change the posting date and you make it impossible for people to post into a prior period – if you then have to post back you’d have to change your posting date. Anything else? Yes, one other. When we change posting date, some people can’t post the sales orders because of inventory errors.

What would we recommend? Okay, this usually happens if you’ve got very old inventory and sometimes you try and post a sales order and that cost of sales wants to post and it needs to change the values on a really old inventory transaction that’s in a closed financial year. If you start getting problems like that, you need to start using inventory periods.

And that’s a little separate calendar that goes on the side that says, if somebody needs to post any of these inventory adjustments related to sales and purchases. This is the oldest date that they can use, and it will then date that transaction to that date. So it stops them doing it in the old year, it posts it in the New Year, but it lets them get on with their work. So if you do need to use inventory periods, and you’re struggling, give us a shout and we can help you with that. Okay, that’s great. Thanks Ian. Thank you.

So just going to leave you with the 5 key takeaways about preparing for year-end. So, the first thing to do is make sure you’re prepared. If you do it right, then it can be done quickly. Make sure you take the time to clear everything up and then follow the steps in our how-to guide, and it will save you a lot of time when it comes to doing your year end. Make sure you run the standard reports in NAV/Business Central first, just to check before completing your final reporting pack. One tip that we can give you, which Ian mentioned before, is start creating your own internal living document for any special cases that might be unique to your business, and how you overcame them.

So next year you will have a method of actually answering those questions rather than having to go through it all again. And finally, if you do need any additional help then please don’t hesitate to give us a call.

Okay, so I hope you found this webinar interesting and informative, as previously mentioned, this is the 22nd in our series of webinars – and we’ll be sending out emails for the next one. We’ll also put a reminder in the webinar, or you can go to our website for it. We’re just showing you on screen now what the next few webinars are, if you’re interested in registering for them. So thank you for attending and I’m going to close this session now in a survey will appear, it would be great if you could respond if you do have any feedback, but if you have any questions, feel free to email them to me marketing@tvisiontech.co.uk . Thank you very much. Thanks guys.