In standard Microsoft Dynamics 365 Business Central or NAV there is no “hard-close” for a month-end. However, there are many accounting period activities that can be completed. This blog provides a high level list of elective processes and tasks for closing period within Business Central or NAV.
In basic terms, you need to go through the following processes for each sub-module.
General Ledger
Regularly review General Ledger accounts to ensure control accounts (i.e. customer, vendor, bank, fixed asset, inventory and etc) do not allow direct posting.
- Post your general journals & adjustments
- Post recurring journals
- Run ‘Adjust Exchange Rate’ batch job if using Foreign Currencies
- Run financial reports
- Financial Reporting – reporting tools used to create a customer financial statement directly from the general ledger, which can be filtered by general ledger entries and general ledger budget entries, dimension and generate reports by exporting to Excel.
- Trial Balance report
- Income Statement
- Balance Sheet
- Specify system-wide (posting date range in General Ledger setup) and user-specific posting periods (posting date range in User setup) to close the period.
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NOTE: Period closing should occur after all sub-modules processes and activities have been processed as the closing process prevents posting to that period.
Sales and Receivables
- Ensure all sales orders, sales invoices, sales return orders and sales credit notes for the month are posted.
- Post Cash Receipt Journals and recurring journals (i.e. direct debit receipts).
- Post any other related journals or adjustment related to receivables (i.e. bad debt write-off).
- Apply any unapplied entries (Credit notes, payments etc)
- Run the Aged Accounts Receivable report to reconcile with General Ledger’s Debtor Account.
- Generate and send customer statements and reminders.
Purchase and Payables
- Ensure all purchase orders, purchase invoices, purchase return orders and purchase credit notes for the month are posted.
- Post Payment Journals and recurring journals (i.e. direct debit payment).
- Post any other related journals or adjustments related to payables (i.e. bank fees).
- Apply any unapplied entries (Credit notes, payments etc)
- Run the Aged Accounts Payable report to reconcile with General Ledger’s Creditor Account.
Bank Account
- Ensure all customer receipts are posted
- Ensure all vendor payments are posted.
- Make all necessary bank fees, deposit interest earned and other recurring transactions are posted.
- Perform bank account reconciliation.
- Run the bank reconciliation report to reconcile the transaction in Bank Account with General ledger’s Bank Account.
Fixed Asset
- Post any additional fixed assets through either – purchase order, purchase invoice or FA G/L Journal.
- Disposal any additional fixed assets through sales invoice or FA G/L Journal.
- Post any asset adjustment through FA G/L Journal (i.e. asset write off).
- Use Calculate Depreciation function to post depreciation.
- Run Fixed Asset report Fixed Asset Book Value to reconcile with General Ledger’s Fixed Asset Account by selecting the Group Totals option “FA Posting Group”.
Inventory
- Use item journal to make a necessary inventory adjustments.
- Run adjust cost & post cost to G/L item entries process (this is to adjust inventory values in value entries so that the correct adjusted cost is used for updating the general ledger, and so that the sales and profit statistics are up-to-date).
- Run the Inventory Valuation report to reconcile with General Ledger’s Inventory or Stock Account.
NOTE: We recommend you always run the batch job for all inventory items. Only use the filtering option to reduce the runtime of the batch job, or to fix the cost of a certain item.
GST Statement
- Reconcile GST account.
- Print or preview GST Statement to reconcile with General Ledger Account.
- Run ‘Calculate and Post GST Settlement’ batch job.
So, there you have it! Elective processes to help your month-end go that little bit more smoothly.