Period End Closing in Financial Accounting

1. Period End Closing in Financial Accounting SAP Best Practices

2. Purpose, Benefits, and Key Process Steps • Purpose • The closing operations component helps you prepare and carry out the activities required for day-end, month-end and year-end closing. • For this purpose, the system provides a series of standard reports that can be used to generate evaluations and analyses of the posted account balances directly. • Benefits • The system helps you to carry out the following: • create the balance sheets and P&L statements • document the posting data • Key Process Steps • Day-end Closing • Month-end Closing • Year-end Closing

3. Required SAP Applications and Company Roles • Required • Enhancement package 5 for SAP ERP 6.0 • Company Roles • Finance Manager (US) • General Ledger Accountant • Accounts Payable Manager • Accounts Receivable Manager • Accounts Receivable Accountant • Accounts Payable Accountant

4. Detailed Process Description • Day-end Closing in Financial Accounting • Update Exchange Rates • Gaps in Document Number Assignment • Invoice Numbers Allocated Twice • Display Compact Document Journal.

5. Detailed Process Description • Month-end Closing in Financial Accounting (I) • Update Exchange Rates • Gaps in Document Number Assignment • Invoice Numbers Allocated Twice • Open and Close Posting Periods • Enter Recurring Entries • Post Recurring Entries • Run Batch Input Session • Automatic Clearing of GR/ IR Account special process • Analyze GR/ IR Clearing Accounts • Automatic Clearing of GR/ IR Account • Post Adjustment Entries

6. Detailed Process Description • Month-end Closing in Financial Accounting (II) • Foreign Currency Revaluation • Record of Sales and Use Taxes Report • Post Tax Payable • Advance Return for Tax on Sales/ Purchases • EC Sales List • Foreign Trade Regulation Reports Z4 • Foreign Trade Regulation Reports Z5A • Comparison Documents/ Transaction Figures • Close Previous Accounting Period • Balance Interest Calculation • Display Document Journal • Financial Statement.

7. Detailed Process Description • Year-end Closing in Financial Accounting • Create Factory Calendar for New Year • Carry Forward AP/ AR Balances • Carry Forward GL Balances • Re-grouping Receivables/ Payables • Balance Confirmation Receivable • Balance Confirmation Payable • Final Close and Release Financial Reporting • Close Previous Accounting Period • Display Document Journal • 1099 (for U.S. and Canada only)

8. Process Flow Diagram Process 1, Day-End Closing Event Updating Evaluation Reporting Finance Manager General Ledger Accountant Update Exchange Rates Display Compact Document Journal Process Decision Gaps in Document Number Assignment Invoice Numbers Allocated Twice

9. Process Flow Diagram Process 2, Month-End-Closing Event Clearing Reporting Updating Evaluation Posting General Ledger Accountant Update Exchange Rates Close Previous Accounting Period Automatic Clearing Display Document Journal Foreign Currency Revaluation Open and Close Posting Periods Comparative Analysis Automatic Clearing of GR/IR Account Special Process Post Adjustment Entries Finance Manager (U.S.) Record of Sales and Use Taxes Report Financial Statement Finance Manager Gaps in Document Number Assignment Enter Recurring Entries Run Batch Input Session Invoice Numbers Allocated Twice Post Recurring Entries Comparison Documents / Transaction Figures Post Tax Payable Accounts Payable Manager Manual Clearing

10. Process Flow Diagram Process 3, Year-End-Closing Event Updating Reporting Finance Manager Finance Manager/US Process Decision Print 1099 MISC Forms Create Factory Calendar for New Year General Ledger Accountant Carry Forward AP/ AR Balances Carry Forward GL Balances Final Close and Release Financial Reporting Close Previous Accounting Period Display Document Journal Accounts Receivable Accountant Balance Confirmation Receivable Accounts Payable Accountant Balance Confirmation Payable GL = General Ledger

11. Diagram Connection Legend <Function> Hardcopy / Document External to SAP Financial Actuals Business Activity / Event Budget Planning Unit Process Manual Process Process Reference Existing Version / Data Sub-Process Reference Process Decision System Pass/Fail Decision