Repost to previous year, perform foreign currency valuation of balance sheet accounts, clear G/L-accounts, clear GR/IR-accounts, perform accruals, reserves for doubtfull accounts, classify receivables and payables, perform profit & loss and balance sheet adjustment.
Close previous fiscal year for G/L accounts
Reporting on the G/L accounts of the previous year is now possible.
Compare balances of previous & current year
Verify if balance carry forward has been completely performed.
Transfer data to group consolidation system
Different techniques of data transfer such as realtime- update or periodic data transfer are available. Data can be provided for legal and/or management consolidation.
Create financial statements, journals, full audit trail & ratios
SAP offers multiple layout and download functions.
Perform intercompany reconciliation
Perform intercompany reconciliation for balance sheet and P&L.
Check data consistency
Compare transaction figures with document totals.
Perform physical inventory & post differences
Use continious, periodic, spot-check or cycle-counting method. Adjust inventory and transitory stock material.
Maintain GR/IR account
Perform adjustment postings, if delivered quantity of material differs from quantity invoiced and no further material is expected.
Perform stock valuation
Activate material price from former manual price change. Different groups of stocks have to be valuated: RSC (Raw material, supplies and consumables), work in process and finished goods. Different value determinations such as market prices or percentage devaluations for stocks that are not fast-moving or that have a large range of coverage can be used. Lowest value determination according to market prices and lowest value determination according to rate of movement/ range of coverage as well are possible. Settle production orders, determine work in process.
Manually change material price
Adjust material price, if average price differs much from standard price. Inhouse-procuced material: Decide when new price from price calculation will be activated.
Perform closing for cost centers, internal orders, projects & processes
Perform periodic reposting, assessment, distribution, accruals of imputed costs, indirect activity allocation, target=activity allocation, allocations according to template, surcharges, splitting of actual costs, price calculation, variances on cost centers and processes, transfer to profitability analysis.
Perform closing activities in product costing
Settle orders, perform actual calculation.
Prepare data for profitability analysis
Transfer external data to PA, periodic revaluation, determine summary levels, top-down distribution of plan data.
Create ratios, object analysis sheet & others
SAP offers multiple layout and download functions.
Perform price calculation
Determine new price for inhouse-produced material.
Change fiscal year
To be performed in the last period of the fiscal year. Carry forward the asset account balance to the new year.
Review & close capital spending orders & projects
Allocate costs according to templates or other allocation rules, perform settlements from orders to assets under construction, determine surcharges.
Review & close assets
Capitalize assets under construction; perform manual adjustment postings and mass changes; check asset master for locked cost centers; post depreciation for imputed and commercial costs and interests; perform periodic postings; recheck depreciation values.
Perform reconciliation of fixed assets with G/L-accounts
Verify if totals of asset subledger accounts equal totals of corresponding balance sheet accounts.
Close previous fiscal year for assets
Additionally run archive programs, perform simulation of depreciation (future prospective), plan primary costs for depreciation and interests.
Create asset history sheet
SAP offers multiple layout and download functions.
Prepare fiscal year change
Check incomplete asset master data (for ex. asset master without cost center assignment). Create inventory list. Review depreciation parameters using "what-if"-simulations.
This Business Scenario Map is designed to show how the different departments of a company - Financials, Controlling, Inventory and Asset Accounting - can perform a local close at the end of a fiscal year. The steps shown below may vary from one company to the other for organizational, technical or legal reasons. Beyond this, the steps are not limited to the end of the year. They can be performed at the end of every period. The main business benefits achieved with the implementation of this scenario are data consistency and transparency, as well as an increase of efficency in order to perform a fast close.
Show Document Flow
Business Benefits
Efficiency throughout closing process
Data integration from all feeder systems
Valuation methods according to international and local GAAP
Increased data quality by test modes
Independent of fiscal year definition
Financial Department
Inventory Accounting
Controlling/Product Cost Controlling
Asset Accounting / Investment Management
OLD YEAR: Open posting periods for new fiscal year
Carry forward balances of G/L-accounts and subledgers
NEW YEAR: Maintain periods for closing postings
Close previous fiscal year for customer & vendor postings
Create financial statements, journals, full audit trail & ratios
Perform intercompany reconciliation
Check data consistency
Perform physical inventory & post differences
Maintain GR/IR account
Perform stock valuation
Manually change material price
Perform closing for cost centers, internal orders, projects & processes
Close posting periods of previous year for cost centers
Perform closing activities in product costing
Close posting periods of previous year for controlling
Prepare data for profitability analysis
Create ratios, object analysis sheet & others
Perform price calculation
Change fiscal year
Review & close capital spending orders & projects
Review & close assets
Perform reconciliation of fixed assets with G/L-accounts
Close previous fiscal year for assets
Create asset history sheet
Prepare fiscal year change
.
Business Benefits
Reconciled data between managerial and external accounting
Reduced costs for integration technology
Transparency of data from financial statement item to original document
Update data by repetiton of program runs
Adaptable to individual organizational requirements
Local Close
The process of year-end-closing seems to be a time critical process for the majority of companies. Gathering data for legal reporting from all feeder systems into the legacy system very often represents an organizational and technical challenge. Beyond this, today's markets expectance increases the demand of quickly offering Balance Sheet and Profit & statements containing reliable and transparent information. SAP's R/3 -Enterprise Business Suite supports in an easy way performing a local close including all the data required for legal reporting. The main business benefits achieved with the implementation of this scenario are data consistency and transparency, as well as an increase of efficency in order to perform a fast close.