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 and • document the posting data. • Key Process Steps • day-end closing, • month-end closing and • year-end closing.

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

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 • 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 • Final Close and Release Financial Reporting • Close Previous Accounting Period • Display Document Journal.

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

9. 2 6 4 5 3 Process Flow Diagram Process 2, Month-End-Closing (I) Event Updating Evaluation Posting Finance Manager Process Decision Process Decision Process Decision Update Exchange Rates Gaps in Document Number Assignment Post Adjustment Entries Enter Recurring Entries Open and Close Posting Periods Invoice Numbers Allocated Twice Post Recurring Entries Foreign Currency Revaluation Close Previous Accounting Period Comparison Documents/ Transaction Figures Run Batch Input Session Balance Interest Calculation

10. 6 2 3 Process Flow Diagram Process 2, Month-End-Closing (II) Event Clearing Reporting Finance Manager Analyze GR/ IR Clearing Account Display Document Journal Financial Statement Automatic Clearing of GR/ IR Account Accounts Payable Manager Automatic Clearing of GR/ IR Account Special Process

11. Process Flow Diagram Process 3, Year-End-Closing Event Updating Reporting Finance Manager Process Decision Create Factory Calendar for New Year Carry Forward AP/ AR Balances Carry Forward GL Balances Final Close and Release Financial Reporting Regrouping Receivables/ Payables Close Previous Accounting Period Display Document Journal Accounts Receivable Manager Accounts Payable Manger GL = General Ledger

12. 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