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Period End Closing Financial Accounting

Period End Closing Financial Accounting. SAP Best Practices. 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.

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Period End Closing Financial Accounting

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  1. Period End Closing 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: • Instantly create financial reporting, like Balance Sheets and P&L statements and • document the posting data. • Key Process Steps • Day-end closing • Month-end closing • 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 • Accounts Payable Manager • AP Accountant • AR Accountant • IT Administrator (Professional User) • General Ledger Accountant • General Ledger Accountant (China)

  4. Detailed Process Description • Day-end closing in Financial Accounting • Update exchange rates • Check gaps in document number assignment • Check invoice numbers allocated twice • Display compact document journal • Display financial reports

  5. Detailed Process Description • Month-end closing in Financial Accounting <1> • Update exchange rates • Check gaps in document number assignment • Check invoice numbers allocated twice • Open new accounting period • Enter recurring entries • Create recurring entries batch input session • Run batch input session to post recurring entries • Proceed automatic clearing of GR/ IR account • Analyze GR/ IR clearing accounts • Proceed automatic clearing of accounts • Post adjustment entries • Revaluation foreign currency balance • Compare document/transaction figures • Close previous accounting period • Display document journal • Release financial reporting

  6. Detailed Process Description • Month-end closing in Financial Accounting <2> • GR/IR reports • Aging reports

  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-group receivables/payables • Bad debt provision • Create receivable balance confirmation • Create payable balance confirmation • FIFO Valuation • Final close and release financial reporting • Close previous accounting period • Display document journal. • Cash flow statement

  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 Cash in Hand Diary Ledger Bank Deposit Diary Ledger Printing out Financial Voucher

  9. Process Flow Diagram Process 2, Month-End-Closing < 2-1> Event Updating Posting Reporting Process decision Process decision Finance Manager Display document journal Check gaps in document no. Open new accounting periods Update exchange rates Enter recurring entries Clearing of GL accounts Sub Ledger Journal Check invoice no. allocated twice G/L Balance Report Create& run batch input session Post adjustment entries G/L Sub Ledger Report Revaluate foreign currency Clearing of GR/ IR account Compare document/ transaction figures Expense Detail Report Analyze GR/ IR clearing account Release financial statements Close previous accounting period Balance Sheet Report Profit Loss Report

  10. Process Flow Diagram Process 2, Month-End-Closing <2-2> Event Reporting Finance Manager GR/IR Clearing Delivered but not Invoiced GR/IR Clearing for Invoiced but not Delivered A/R Aging Report A/P Aging Report

  11. Process Flow Diagram Process 3, Year-End-Closing Event Updating Reporting AR Accountant Confirm AR balance AP Accountant Confirm AP balance Finance Manager/GL Accountant Process decision Regroup AR/AP Carry forward AP/ AR balances Carry forward GL balances Final close & release financial reporting Provision for Bad Debt Manual offset. Account Determination (Optional) Cash Flow Report FIFO Valuation Display document journal Create factory calendar Close previous accounting period

  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

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