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How To Guide

SAP Business One 9

How to Perform Year End


in SAP Business One

Overall Business Processes


ACCOUNTING

Related Business Process


ACCOUNTING

Responsible Department
ACCOUNTING

Involved Departments
ACCOUNTING
Last Updated
08/05/2014

Copyright 2014 Supernova Consulting Ltd. All rights reserved.


This content may not be reproduced or transmitted in any form or by any means, electronic or mechanical, including
photocopy, recording, or any information storage or retrieval system, without written permission. Requests for
permission should be directed to info@supernova-consulting.com, +357-25-817880, or mailed to Supernova
Consulting Ltd, P.O. Box 56747, 3309, Limassol, Cyprus

Copyright 2010 Supernova Consulting Ltd. All rights reserved.

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How To Guide
SAP Business One 9

CONTENTS
YEAR END (PERIOD END CLOSING) ......................................................................................................................3
INTRODUCTION..............................................................................................................................................................3
PROCESS FLOW .............................................................................................................................................................3
DESCRIPTION.................................................................................................................................................................3
PREPARATION .............................................................................................................................................................4
BACKUP ........................................................................................................................................................................4
CHECKING CONTROL ACCOUNTS ..................................................................................................................................4
EXCHANGE RATE REVALUATION ..................................................................................................................................6
FINANCIAL AUDIT ADJUSTMENTS .................................................................................................................................9
RUN STOCK AUDIT REPORT ..........................................................................................................................................9
RUN PROFIT AND LOSS STATEMENT............................................................................................................................ 12
YEAR END CLOSING................................................................................................................................................. 13
YEAR END CLOSING PROCESS..................................................................................................................................... 13
EXAMPLES OF POSSIBLE ERROR MESSAGES .................................................................................................. 18
DISTRIBUTION RULE ................................................................................................................................................... 18

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How To Guide
SAP Business One 9

Year End (Period End Closing)


Introduction
The Year-End Closing window enables you to create postings in the accounting system when a
fiscal year or posting period ends.
This function allows the transfer of previous profit and loss G/L account balances from one fiscal
year or period to another.
The procedures described in this function represent a concept that is generally applicable. The
character of this document is generic and does not cover special cases.

Process Flow
The procedures described in this document must be followed step by step for accuracy of content
or the completeness of the year-end closing. You are ultimately responsible for the correct
operation of this and providing the necessary documentation to ensure accuracy.
Before performing this procedure, it is highly advisable that you discuss the procedure in detail
with your audit consultant or the person responsible for your year-end closing (if applicable).
BackUp

Checking
Control
Accounts

Exchange Rate
Revaluation

Audit
Adjustments

Run Stock
Audit

Year End
Closing

Description
The Year End Closing function allows companies to easily proceed with the closing of all the
profit and loss items and the transferring of the profit or loss result of the year to the reserves
account in the balance sheet.

Note: All data, values, amounts and names appear within this document do not represent true
figure and are been used for presentation purposes only.

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How To Guide
SAP Business One 9

Preparation
Backup
Perform a backup of the SAP Business One database before you start the Year End Closing
process.
This is important because it is not always possible to re-construct a report backdated to the cut-off
date in SAP Business One. The status of the previous fiscal year is saved in the backup.
Note: If you are not familiar with the backup procedure please contact your
IT administrator or Supernova Support Center.

Checking Control Accounts


Checking Control Accounts that are matching the individuals master data balances is a simple
process. Please follow the process below for checking the Control Accounts.
1. From Main Menu go to ReportsFinancialsFinancialTrial Balance

2. The Trial Balance Selection Criteria window will open.


3. Select BP indicator and select under Groups field the option ALL.
4. Select Debtors and Creditors Accounts.
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How To Guide
SAP Business One 9

5. At the Date field select Posting Date and enter as the date range the first and the last date
of the year that you are processing for the Year End.
6. Click OK.
7. The Trial Balance Report will pop up.
8. In this example G/L Accounts are viewed at level 1.
9. Check that Customers and Suppliers totals are equal to the Control Account Balances.

10. You can change the level as shown below to view more details.

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How To Guide
SAP Business One 9

Exchange Rate Revaluation


When you maintain a foreign currency (FC) business partner and/or accounts, all related
bookkeeping is conducted in the FC. As the bookkeeping system must also be conducted in local
currency (LC), every FC transaction of this nature also is expressed in LC according to the FC
exchange rate on the date of transaction. The daily fluctuations in the FC exchange rates create a
situation whereby the balances in LC and FC do not match. The automatic exchange rate
differences are designed to periodically recalculate the LC and FC balances, according to the
exchange rate on the day the differences are calculated.
SAP Business One can provide recommendations for executing automatic journal transactions for
exchange rate differences in FC business partners and accounts, correct to a given date. The
function of the program that calculates the exchange rate differences is to reconcile between the
FC card balance and the LC balance, considering the fluctuation in the FC exchange rate.
The exchange rates used for revaluation are those saved in the exchange rate table on the execution
date. The current exchange rate that is valid for the valuation must already exist in the exchange
rate table before executing the transaction.
1. To access the Exchange Rate Differences function, choose Financials Exchange Rate
Differences.
2. Select Business Partner.

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How To Guide
SAP Business One 9

3. Enter Exclude Gains with Due Date After and Execution Date.
4. Enter the G/L Accounts for Gain and Loss.
5. Currently, the execution date is used only to determine the exchange rate from the rate
table with this date. The system does not select the open items backdated to this date and it
selects the open items based on the system date. Therefore, we recommend that you
perform the currency valuation promptly after all transactions for the previous fiscal year
have been entered or do a manual comparison with the results of the AGING report.
6. Click Execute.
7. The Exchange Rate Differences window will pop up.

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How To Guide
SAP Business One 9

8. Fill in text fields, check BP account differences.


9. Select BPs and click Add.
10. In this example, the account of the 1st BP will be debited with 0.05 and the Exchange rate
G/L account will credited with 0.05
11. The 2nd BP account will be debited with 0.01 and the Exchange rate G/L Account will be
credited with 0.01
12. The 3rd BP account will be debited with 0.02 and the Gain/Loss Account will be credited
with 0.02
13. The system in this example will create three journal entries, one for each BP Account.
14. Some processes must be followed for the General Ledger Accounts as shown below.

15. Click Execute.


16. We recommend that you create an automatic reverse posting on the first day of the
subsequent period.

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How To Guide
SAP Business One 9

It is advisable to check the suggested accounts carefully. Very often, you have to differentiate
between realized and unrealized exchange rate differences. The system default shows the accounts
that are set in the account determination setup and the accounts are normally set for realized
exchange rate differences.

Financial Audit Adjustments


After audit control you must proceed with the final audit adjustments postings.
Note: All financial adjustments must be posted on the last date of each fiscal year

Run Stock Audit Report


This report provides an audit trail for the posted stock transactions in the chart of accounts.
You use this report to make comparisons between the accounting view (stock balance accounts)
and the logistics view (stock value displayed by the audit report). The report explains the value
changes in stock accounts.
Inventory Audit Report
Go to Modules Stock Management Stock Reports
Click to Stock Audit Report.
Select the appropriate G/L Accounts, through Accounts Selection Criteria, so a user to
be able to see the stock balance.

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How To Guide
SAP Business One 9

Click OK
Click Ok

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How To Guide
SAP Business One 9

Trial Balance
Go to Modules Financials Financial Reports Financial
Click to Trial Balance.
Select the appropriate G/L Accounts for stock value. If the below section is not appear the
user has to tick the check-box next to G/L Accounts (text)

Click Ok.

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How To Guide
SAP Business One 9

Run Profit and Loss Statement


Next Step is to Run a Profit and Loss Statement for the corresponding year and make sure the
Total Balance of the report is the same with the Profit and Loss Amount extracted by your
Auditors.
1. To run the P&L Report choose Reports -> Financials -> Financial -> Profit and Loss
Statement.

2. Select the Date Range you would like for the P&L Report to run (the Year End Date
Range)
3. Click OK to run the report
4. Check the total Profit or Loss Amount generated; this amount needs to be the same with the
amount of P&L derived from your Auditors in order to continue with Year End Closing.

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How To Guide
SAP Business One 9

Year End Closing


Year End Closing Process
To carry forward the balances of the P&L accounts to the corresponding account in the balance
sheet (or several different balance sheets), you can use the PERIOD-END CLOSING function.
You can store the result initially as a report and then post them at a later stage. If you make
postings after the balances carried forward have been entered, you need to restart the period-end
closing routine to include these subsequent postings.
When the balance is carried forward, the balances of the P&L accounts are posted to a clearing
account on the day of carrying forward (the last day of the period). Therefore, the balances are
reduced to zero. On the first day of the subsequent period, the clearing account is posted to the
corresponding balance carried forward to the account in the balance sheet.
Unlock Posting Period:

Unlock the Posting Period of the first and the last month of the Year that you will apply the
Year End procedure. Additionally, you should open the first month of the next year. That
step will let the system to create the Year End transactions, for the G/L Accounts.
Go to Administration System Initialization Posting Periods

Unlock the appropriate Posting Periods one by one.


Click Ok.

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How To Guide
SAP Business One 9

Period End Closing:


Go to Modules Administration Utilities Period-End Closing.

Select the Period as year, for this example is the year 2010.
In the From and To fields enter the first and the last month of the year as shown above.
In the Retained Earnings Account field choose the relevant G/L account to be used as the
clearing account in the journal posting made in the accounting system, i.e. Retained Earnings
for the Year
In the Period End Closing field choose the relevant G/L account to be used as a clearing
account to the P&L account, and to the retained earnings account, Year Earnings Suspense.
Click Execute. The Period-End Closing window will open as shown below.

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How To Guide
SAP Business One 9

In the Ref 1 and Ref 2 fields, enter required references for the journal entries.
In Due Date and Document Date, enter required dates for the journal entries.
Click on the Approved column label to select all the accounts and click Execute.

NOTE: For any possible error please refer to the last section of this document.
Journal Entries:
After the system finishes the Year End Closing calculations, go back to the journal entry window.

1. Click to Previous button from the toolbar to go the last transaction.


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How To Guide
SAP Business One 9

2. You will notice that the system credited the Retained Earning B/F account and debited the
Retained Earnings for the Year account using as posting date the 1st date of the new fiscal
year.

3. If you go back one more transaction, you will find that the system credited the P/L Account
and debited the Retained Earnings B/F account with the same amount as in the last
transaction.

4. Locked the Posting Periods that you have opened before.

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How To Guide
SAP Business One 9

5. These are the transactions that the system records for each P/L Account.

NOTE: Instead of using R/E B/F you can use R/E directly. If you use R/E B/F then
you need to manually post Profit / Loss from R/E B/F to R/E

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How To Guide
SAP Business One 9

Examples of Possible Error Messages


Distribution Rule
Error 1: Distribution Rule
First possible error, it refers to Distribution Rule restrictions, and it looks like below:

o G/L account xxxxxx needs DR assignment for dimension 1; fill in DR-related fields
Error 2: Project Rule
Second possible error, it refers to Distribution Rule restrictions, and it looks like below:

o G/L account xxxxxx needs project assignment; fill in project-related fields


Solution:
For both errors, a user needs to define the two types without distribution rule, as you can
see below.
Go to Administration System Initialization General Settings Cost Accounting.

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How To Guide
SAP Business One 9

Copyright 2014 Supernova Consulting Ltd. All rights reserved.


This content may not be reproduced or transmitted in any form or by any means, electronic or mechanical, including
photocopy, recording, or any information storage or retrieval system, without written permission. Requests for
permission should be directed to info@supernova-consulting.com, +357-25-817880, or mailed to Supernova
Consulting Ltd, P.O. Box 56747, 3309, Limassol, Cyprus

Copyright 2010 Supernova Consulting Ltd. All rights reserved.

Page 19 of 19