The end of the year is quickly approaching. It’s always such a busy time, especially for those of us in accounting. Not only do we have the distractions of holiday dinners, decorating and shopping, but we have to remember these Microsoft Dynamics AX accounting year-end closing procedures that we only do once a year.
|Year-End Prepper Tip #1: Create annual reminders in your Outlook calendar. Include each of these steps.|
- What did you do last year?
- Where are those reminders again?
- How do I not forget again next year?
Don’t panic! We are here to help. Here are the 5 critical Microsoft Dynamics AX year-end closing procedures:
Step 1: Create a new fiscal year in Microsoft Dynamics AX
The process to create your new fiscal year is pretty simple.
- In Microsoft Dynamics AX 2009, navigate to General Ledger > Setup > Fiscal Calendars.
- In Microsoft Dynamics AX 2012 this is located in General Ledger > Setup > Fiscal Calendars.
Remember when you are creating your fiscal year, setting the periods correctly will save time and prevent headaches. You are being asked to define the length of period. Do not be fooled into thinking “I have 12 periods in the year, so it should be 12.” WRONG, this would give you an operational period that is 12 months long. The correct answer would be 1 month.
Once you have created your year, don’t forget to put your periods on HOLD (or for you 2009er’s put them to a status of STOPPED).
Step 2: Create your closing sheet or create your year-end journal entries
For your year-end adjusting entries, make sure you are posting them to the 13th period so that they do not muddy the monthly operational data.
|Year-End Prepper Tip #2: Set a reminder mid-December to OPEN the periods for January. This will ensure a smooth transition.|
Step 3: Close the year and create a new opening transaction
After you have verified the ending balances, you are now ready to transfer the balances to the new fiscal year. The good news is Microsoft Dynamics AX will allow you to repeat this process over and over, and you can set your parameters so only the final posting is reported in the accounts. With this setting, you don’t have a mile long list of closing/opening transactions; it’s neat and it’s complete. This process will close your profit and loss accounts to the Retained Earnings account and transfer your balance sheet accounts.
DON’T FORGET: In Microsoft Dynamics AX 2012 you can choose to have the balances transferred with or without financial dimensions.
Step 4: Validate your 1099 data and vendors
Validate your vendors that are setup for 1099s and review your 1099 transactions in November and December! Don’t wait till late January and scramble to get this done. Remember, 1099s must
|Year-End Prepper Tip #3: Validate your 1099 vendors and transactions early!|
be mailed no later than January 31st.
One of the easiest ways to review vendor 1099 eligibility and verify correct vendor master setup is to personalize your vendor list screen. Add the following fields to your list screen and you will be able to filter and view all vendor information for accuracy and completeness.
- Report 1099 – This is THE most important box to mark if you want to actually report 1099 data for a vendor
- 1099 box – Choose the type of 1099 that the vendor should receive (you can have more than one type of 1099, but that has to be done on the vendor settlements for 1099s form)
- Tax ID Type – This can be their EIN, SSN, Individual taxpayer ID or Adopted tax payer ID
- Federal Tax ID – This is the number related to the Tax ID Type
- Check for W-9 and W-9 received
To validate and modify your 1099 data, run the vendor settlement for 1099s for each of the vendors and review the transactions. (HINT: If you just want a report of the 1099 data, you can run this by going to: Accounts Payable> Reports> Tax 1099.) You have the option to run the Tax 1099 in summary or in detail. One very important report to run is the Tax 1099 Duplicate Taxpayer Identification Report. This will tell you if you have more than one vendor using the same tax ID.
Step 5: Review 1099 vendor information quarterly
Just because it is year-end does not mean your daily workload disappears. Because you have a limited amount of time at year end to verify and correct data, it is a good idea to also perform a quick
|Year-End Prepper Tip #4: Be prepared! The 1099s MUST be mailed by January 31st to the vendors.|
check each quarter or at mid-year on vendor 1099 information. This can be scheduled as a full review or by dividing up the alphabet and reviewing a segment each quarter. Correcting data and set-up problems through-out the year may significantly reduce 1099 stress. Below are some of the items you can do on a periodic basis.
- Run the Tax 1009 Duplicate Taxpayer Identification Report quarterly and make corrections
- Review 1099 information on the vendor list screen and make corrections each quarter
- This will allow you to contact the vendor and make corrections well before the year-end rush
Being prepared for the end of the year will take loads of stress off you and your accounting team. Small steps done throughout the year to ensure data accuracy will make the entire year-end process seamless.
Need help? Reach out to the mcaConnect Managed Services team!
Written By: Stacy Black