Financial Year End

Transcription

1 Financial Year End Author(s): Kath Ryans, MIS Consultant, The ICT Service Reviewed by: Publication date: February 2018 Version: /01/218 Review date: February website: telephone:

2 Contents Introduction... 3 Set up... 4 Close any previous year... 4 Editing Structure... 6 Creating the new financial year Create the VAT Periods for Define the Salary Periods for Preparing for Closedown To view outstanding order reports To view details of outstanding invoices Print details of Accounts Receivable invoices Print details of un-banked receipts for both processes Non-Invoiced Income Year End Checks Closedown Month End Beginning of April Year End Checks Updating the Structure Preliminary Closedown Write off Accounts Receivable invoices Closed Year Transactions Coding Adjustments Accruals & Pre-payments How to create a Year End Reversing Journal Closing the old Financial Year Close the old year Appendix A Clearing the FC Codes Before a Preliminary Close is run After a Preliminary Close Appendix B Dealing with the System Check To clear Fund Allocations error Deleting/Editing Structure within FMS Unlink Ledger Codes from the Consistent Financial Report (CFR) Deleting Ledger Codes from FMS6 Not recommended Notes Page 2 of 44

3 Introduction The Process of Year End actually covers almost half the year from the start of preparation to Final Close. It usually starts shortly after Christmas and continues until around Mid-June. It is not continuous and can be done in small segments throughout this period. As far as possible the manual has been set out in the same sequence as the Year End process, starting with Setup and Preparation, through Housekeeping to Reporting and Closedown. Experienced Users will have already carried out some of the processes and can ignore those sections. The manual provides information to carry out the smooth transition from one financial year to another. Please read the manual carefully as the process for setting up the new financial year 2018 has changes. Check your s for updated instructions from both County and the ICT Service. If you share mail boxes please ask that NO finance related s are deleted from the system. Page 3 of 44

4 Set up All processes in Section 1 are carried out in the CURRENT year except where stated. Before setting up the new financial year 2018 Close any previous year Ensure the previous financial year is closed e.g. close 2016 before setting up Even though a new year can be created it cannot be either opened or worked on whilst two previous years are open. If you still have 2016 open please close. Highlight 2016 and click on Preliminary Close Select Tools Define Financial Years Define Edit Years The following message will appear. Click on Yes Page 4 of 44

5 Click on Continue. (The aim is for a full list of Green Ticks in the Passed Column) The following screen will appear. You are a Bank Account School. You do not use Central Payments so it does not matter which field you select. Click Continue. Another screen of green ticks will appear and once it is complete click Perform Close. The status of 2016 will remain as Closed Not Finalized REPEAT the process again but press the FINAL CLOSE button not the PRELIMINARY CLOSE button When Complete click on Perform Close and say yes to the warning The status will change from Closed Not Finalized to Finalized. Click Save Page 5 of 44

6 Editing Structure Take the opportunity of having just one year open to delete redundant structure because once the new year is opened there will be limited possibility of deleting any structure. Remember: deleting editing codes is only possible after they have been released from all User Defined Reports as this could invalidate those reports in past years. It is better not to delete any ledger codes, just detach them from Cost Centres. The creation of the 111GEN Cost Centre last year meant that every ledger code within FMS is linked. This SHOULD be edited so you only see the ledger codes that are relevant to your school. You can also look at all the redundant cost centres with XXX in the code. Unlinking all the redundant ledger codes mean you can go on and delete the redundant cost centres. Examples to delete are: Employees, Support Services, Admin, Premises etc., Why wade through long redundant cost centres and ledger codes? Notes on Editing Structure are included within this publication as Appendix C. Once 2016 is Finalised you are free to set up 2018 Creating the new financial year 2018 Select: Tools Define Financial Years Define Edit Years Click on the + PLUS Button Page 6 of 44

7 Your screen should replicate the one as shown above. Click on Save The system will copy your structure and could take some time. Please be patient 2018 will now be in your list of financial years with a status of - Not Started. It is recommended that you Do Not Open the new financial year until you are ready to start the Year End Close Down. Before you can carry out the Preliminary Close, 2018 must be opened. Click the Open Year button. Page 7 of 44

8 Create the VAT Periods for 2018 Select: Tools Define VAT Period Click on the + PLUS Button Does your system look like this? It should as your system should be set to QUARTERLY If you see 12 periods, please ensure you select QUARTERLY when setting up the new VAT Periods as shown below Click Save Ensure that the bullet point is in Quarterly and the Start and End dates are as shown Save Page 8 of 44

9 Define the Salary Periods for 2018 Select: Tools Define Financial Years Define Salary Periods Click on the + PLUS Button Click on Save Select 2017 Click on Save and Save again Page 9 of 44

10 Preparing for Closedown All processes in Section 2 are carried out in the CURRENT (2017) except where stated The following advice applies to all schools. It is considered good practice to keep a regular check on certain totals, particularly when starting the preparation for closing down the financial year. The following routines will allow you to check that certain totals are consistent. These checks focus particularly on Accounts Payable transactions. To view outstanding order reports To identify orders which can be cancelled or need querying. Select Focus Accounts Payable Purchase Orders Change the view to Outstanding to restrict the list to the purchase orders that will be affected by Year End A print of these orders can be obtained using Reports Accounts Payable Purchase Order Reports Purchase Orders. Click in Outstanding Orders and leave everything else blank. Put the bullet into Outstanding Orders Page 10 of 44

11 Check out the dates on the orders. Are there any from previous financial years? If so why? Check out older orders dated from the early part of Are these still relevant, are you still expecting the goods? All Purchase Orders sit as commitments on your system, by dealing with them you are releasing the committed money back into the budget. This does not mean delete all orders showing on the system. To view details of outstanding invoices To check whether there are any double entries, etc. which require deletion, Select Focus Accounts Payable Invoices/Credit Notes, Change Status to Unauthorised Printouts are available using Reports Accounts Payable Invoices Invoice & Credit Note. Selecting Summary will limit the print to a line per invoice. Click on the Status Browser and select Unauthorised Page 11 of 44

12 Print details of Accounts Receivable invoices You only need to carry out this exercise if you run Accounts Receivable. To check for problems, select Focus Accounts Receivable (Invoiced Income) This will open the program for Accounts Receivable (Invoiced Income) Click on Reports Transaction Report The From and To dates will automatically show the current date alter them to encompass the entire year. 01/04/ /03/2018 Leave Debtor blank Page 12 of 44

13 It may take some cross-checking to identify who owes what Select Report Aged Debtor Report Leave Debtor blank to print all debtors It is possible to review each Debtor in turn from the Debtors screen If you know of any Aged Debtors on your system, and you know you will never receive these payments, then you need to write them off in the current year. All other debts that might still be received during the next financial year must be left on the system. Contact The ICT Helpline if you do not have a Write Off code set-up. NOTE: All schools that use Accounts Receivable MUST run the Aged Debtor report and keep copies of this as the School Corporate Team and also AUDIT will need to see these reports to verify the debtor balances on the school balance sheet. Print details of un-banked receipts for both processes In Accounts Receivable (Invoiced Income) click on the Receipt button receipts. to view the list of Created means the receipt has been recorded but not printed note the absence of a receipt number Full means the receipt has been matched against an invoice Double click to select a receipt for editing Page 13 of 44

14 Non-Invoiced Income Non-Invoiced Income within FMS6 also uses receipts Use Focus Non-Invoiced Income Receipts The screen automatically shows the unposted amounts Double clicking on a receipt will open it for editing Unposted transactions need to be either deleted or paid in. Check the money has not been posted into FMS6 via a Cash Book Journal - without knowing the CBJ number you will have to look at dates and amounts. Page 14 of 44

15 Year End Checks Run the Year End System Checks to see what the system identifies as potential problems. Use Reports Year End System Checks See the examples at the end of the booklet for likely problems and resolutions. Note: You may be prompted to update structures. Go to Pages 18/19 for instructions on carrying this process out. Page 15 of 44

16 Closedown All processes in this Section are carried out in the Current Year (2017) Month End Beginning of April Carry out the Month End process as NORMAL, up to the production of the BCR report and submit the BCR only if you have a problem check your s for updated instructions from both County and the ICT Service. If you share mail boxes please ask that NO finance related s are deleted from the system. If your school is not Centrally Hosted you MUST run a backup Year End Checks Run the Year End System Checks and deal with any problems that are revealed Use Reports Year End System Checks This produces a report of all the areas of the system that might have a problem or stop year end running. It consists of the name of the process, list of the transactions and what it considers wrong with them. Work through the list either processing or cancelling the transactions. This Check must be re-run as above until the there are no transactions to report on until then the Closedown cannot be performed. Page 16 of 44

17 Run the report again. This time tick the Includes Boxes. Click OK This will provide a report of all the transactions that will be transferred into the New Year. They fall into two categories transferable and transferable in support. This means that either the item will be a charge against the new budget (transferable) or it is simply for reference and will not affect the budget (transferable in support). See Appendix B at the back of this guide. Updating the Structure It may be necessary to update the structure from time to time if new structure is added to the closing year once the New Year has been created. This should certainly be run before every close. Select Tools Define Years Update Next Years Structure There are four tabs showing always complete Tabs 3 and 4 BEFORE Tabs 1 and 2 Select Tab 3 Click on Copy Templates and Links Page 17 of 44

18 Select Tab 4 Click on Copy Books and Products Select Tab 1 If there are any new codes they will show in the screen. If codes are showing then click the Tag All button Click Copy Tagged Button Finally - Tab 2 If new structure exists it will appear in the screen. If it does, click on Tag All Click on Copy Tagged Click on Close to complete the structure update Page 18 of 44

19 Preliminary Closedown Before carrying out the Preliminary Close on 2017 the new financial year 2018 must be started. If it is showing a status of Not Started it is important to Open the Year and then Save. You will be unable to Close 2017 unless 2018 is showing a status of Started. Run a Preliminary Close as soon as possible after the March Month End report has been run. This closes most functions in the old year, such as ordering, invoicing and cheque processing, and transfers all outstanding items into the New Year. It sets up Period 13 so that amendments to the old year are still possible but only via journals. It also transfers Bank Reconciliation and VAT return printing into the new financial year even if they relate to the old financial year. Note: Closing the year also causes the balances in the Balance Sheet accounts together with a nominal Carry Forward amount for each fund to be entered into the New Year. Make sure the Open Period is 12. If it is not, use the Close Period button period. to get to the correct Click on the Preliminary Close button Page 19 of 44

20 Various checks will be carried out to ensure it is possible to close. There MUST be green ticks in every box in which case click Continue. If there are any red crosses some of the problems from the system check report remain unresolved. Print the report again and resolve the problem it presents then try the close again After Clicking Continue the transfer screen appears Leave it exactly as it is and click Continue The Final check screen appears. As before, the sections should gradually be ticked off. Once complete click on the Perform Close button This will close the overlay and reveal the Year Define screen but now the state of the old year is Closed not Finalised. Click on Save to save the close down process After the Preliminary Close has been successfully completed another set of reports should be run (the same as a normal month end) and a new BCR created. This is the BCR that MUST be submitted to County. Page 20 of 44

21 What a Preliminary Close does: Period 13 is opened in the closing year and period 12 is closed All day-to-day processes such as Ordering, Invoicing or processing cheques are closed in the closing year; they can now only be done in the New Year Bank Reconciliation can no longer be carried out in the closing year even if it relates to the last period. It can still be carried out but it must be done from the New Year VAT returns for the final period will have to be run off from the New Year A calculation is made of the net value of each Fund and those values together with the balances in the control Accounts (Creditor Control, Payroll Control etc.) and the Bank Balance are lodged into the New Year as an Opening Balance Journal. If alterations are made in the closing year it is advisable to run another Preliminary Close to transfer and revised balances in the New Year this will generate TWO journals, one to cancel the previous Opening Balance journal and the second to lodge the replacement journal. Note: The net value of each fund will be shown in the new year against the relevant FD code. It will also appear on the Cost Centre Allocation screen in the Fund Allocation box. It is recommended that after carrying out any adjustments you carry out a Preliminary Close to force the transactions through into the new financial year. Page 21 of 44

22 Write off Accounts Receivable invoices This process does not actually Write Off the invoices from the system. It is a mechanism for moving invoices from one year into another. This can only be done after a Preliminary Close has been carried out This will transfer the outstanding invoices from the budget for the closing year and set them against the budget for the New Year. It will also make them available for normal processing in the New Year. It can only be done once the year is closed. Open Accounts Receivable Select: Focus Accounts Receivable 1. Identify the Invoices to be transferred Click on the Debtors button Double Click on the first debtor to reach the detail screens Select Tab 3 to get to Review Use the down arrow to move through the debtors list to identify those who have a balance and the invoices that make it up Make notes of these invoices Close this screen once completed 2. Transferring the invoices to the New Year Click on the Invoices button Select one of the Invoices previously noted Click on the Write Off button The following message will appear Click Yes to transfer the invoice. Repeat this process with all outstanding invoices Page 22 of 44

23 Closed Year Transactions From now until Final Close check which financial year you are in BEFORE doing anything! There will be two operational Financial Years. Be careful which year you are working in Check the bottom right of the screen frequently. From 1 April 2018 All normal processing will be taking place in the new year: 2018 all Orders must l be placed from the new year it is not possible to add into 2017 as the Preliminary Close has taken place all Invoices must be processed in the new year all Cheques must be raised in the new year all Income will be processed in the new year April Funding Statements will be processed in the new year April Direct Debit Statements will be processed in the new year April Payroll will be processed in the new year There should be very few journals posted in the closing year after the Year End has been submitted! Should corrections need to be carried out the School Corporate Team will authorise the raising of the journals with clear instructions. In the main the only journal required after the Preliminary Close will be those for Accruals and Prepayments or for coding adjustments. Page 23 of 44

24 Coding Adjustments In certain circumstances Corporate Finance may require a school to make adjustments between Ledger Codes and sometimes between funds. All such requests will use Year End Adjustment journals. Accruals & Pre-payments Corporate Finance will provide definitions of what an accrual or prepayment is and how and when to use them. In FMS they both utilise the same mechanism a Reversing Journal. A Reversing journal is so-called because whenever a user creates and posts one, a second journal is posted into the selected year and period. This second journal is a complete mirror image of the original. This means every debit in the first journal becomes a credit in the second and vice versa. In effect the journal re-charges some items from one period or year into another. When using such journals you will find it beneficial to create a journal for each transaction. If you raise a single journal for all transactions, print the journal off and annotate it with details such as supplier and the reason for its inclusion, then store that safely with the year end papers. Reversing journals can be raised at any time, during the Financial Year. They are raised like any other journal through General Ledger Manual Journal Processing. Please consult County if you After the first Preliminary Close when period 13 has been activated there are only two journal types available Year End Adjustment and Year End Reversing. The ICT Service will issue separate guidance notes again this year for Accruals and Prepayments, that will work alongside instructions issued by County. Basic instructions are given within this manual. Page 24 of 44

25 How to create a Year End Reversing Journal As soon as possible after the Preliminary Close (Period 13) start to enter the Reversing Journal for Accruals and Prepayments if required. If you stopped all purchase ordering and non-order invoices as directed on the 9 February, you should have very few if any accruals. Select: Focus General Ledger Manual Journal Processing Click on the + plus to add a journal Select Year End Reversing Journal *Please note your system will show the years as Fill in the details like any other journal but this one will also have the year and period that it is to be created in, then the year and period it is to be unpacked in. Note: Since this can be done over a period of two to three months after the first Preliminary Close and before the Final Close, you will only be able to select the lowest OPEN period and you may not always be able to select April (1). Click the plus to add lines. Select the Ledger Code, Fund and Cost Centre to be charged. Ideally you should be working from a list of reserved Creditors and Advanced Payments that you have prepared in advance. Fill in the amount Fill in the narrative of each line with details of the supplier (or if a receipt in advance note the club/trip details etc.) and anything else significant. The final line of the journal will always be against either the Accrual or Prepayment Code and will be net value of all the previous lines. Page 25 of 44

26 Click on the Save icon and Post the Journal. Note: the actual transaction and the real charge against the Bank remain correctly in the old financial year. Checking that is has worked There is a simple way to verify that a reversing journal has correctly lodged in both old and New Year. Start by running a Preliminary Close to transfer the balances into the New Year Change into the New Year Use Focus General Ledger Chart of Accounts Review Click on the spyglass by All Ledger Codes Locate ACCRUE in the list and double click on it You should see the value of the accruals in the actual column for both period 0 and an opposite value in period 1 (or whichever period was available). The net effect is zero. You can also use this to locate PREPAY in the list, and check those entries too, if you wish. Page 26 of 44

27 Closing the old Financial Year 2017 Do not Finalise the close down of the old financial year 2017 until you have received clearance from the School Corporate Team. Normally this is given between December and January. Close the old year Select Tools Define Financial Years Define Edit Years Select 2017 Click on the Preliminary Close button The following warning message will come to screen Click Yes Page 27 of 44

28 You will see a series of green ticks. If red crosses appear you must click on the Report button which will give a printed report of the problems. Click on Continue The Select Transfer Mode screen will appear Click on the Continue button Once all the checks have completed click on the Perform Close button. Page 28 of 44

29 Now carry the same process again but click on the Final Close Button Once complete the status of the closed year will change from Closed Not Finalised to Finalised Page 29 of 44

30 Appendix A Clearing the FC Codes Bank Account Schools should have nothing in FC Codes. Please check your last Summary Trial Balance to see if you have any amounts in this group of Codes. If you have they must be cleared out before the year is Finally closed. NOTE Fund Allocations can be made in period 13 but Fund to Bank transfers cannot! There are only two sources for values to be present in an FC code either a Fund Allocation has been lodged via Budget Management or a transaction has been set to Central rather than Bank. If this is spotted during a year BEFORE a Preliminary Close is carried out then the problem can be corrected simply by either cancelling the transaction or clearing the Fund Allocation. Contact the Helpline for assistance in this situation Please contact the School Corporate Team BEFORE attempting this exercise. Before a Preliminary Close is run A. Check the Fund Allocation screen The numeric part of the FC code identifies the fund - FC01 relates to Fund 01 Formula Funding. FC02 to Fund 02 etc. Use Focus Budget Management Fund Allocation Highlight the fund in question and click on the History Tab There may well be several entries saying either Opening Balance journal or Reversing Opening Balance journal. These are legitimate and are created by the system. Anything else should not be there and needs to be dealt with. Simply Decrease the Fund by the amount showing as an increase. Once confirmed this will clear any amounts in the FC code B. Check for Central Transactions Use Focus Accounts Payable Invoices and Credit Notes to open the Invoice window. Change the status to Passed for Payment as this would normally be where Central Invoices would show. If any invoices show there they will need to be cancelled. There may then be a question as to whether they should be re-entered or whether they have already been processed in another way through the bank. Alternatively, you could Use Focus Central Central Authorisation Any invoices or Credit Notes showing in that window will need to be cancelled as above. Page 30 of 44

31 After a Preliminary Close After the first Preliminary Close the correction can only be made in the new year in the following manner A. Fund to Bank Transfer Use Budget Management Fund to Bank Transfer Click on the plus to add a journal If the item against the FC code is a DR then select increase, if it is a CR select decrease Select the FC code that needs amending Enter the value lodged against the code (from the Summary Trial Balance) Enter a narrative such as clearing FC amounts Click the Blue Tick which will both save and post Repeat for each FC code with a balance This will have affected the Bank Balance and needs to be nullified B. Adjusting the Bank Balance Use General Ledger Manual Journal Processing Click on plus to add a journal Select Cash to create a cash book journal Select period and give a description such as transferring original balances from FC codes to FD s Select the bank account Type a ref such as FCCorr Click on the plus and add a new line use the CFWD code for each Fund involved (FC01 is Formula Funding, FC03 is Standards etc.) Enter the amount If the original FC value was DR then the amount will be a debit, if CR it will be a credit. Continue until you have a line for every FC code with a balance. Click on the Blue Tick and then Post Now you need to return to the last Bank Reconciliation and select all of these journals (one for each FC plus the final one for the CFWD codes) which will have no effect on the Bank Balance but will get them out of the way. Although this will clear the FC code from the moment the journals are posted it will only transfer into the FD codes when the current Financial Year is closed. However, by using the CFWD code which is a code not normally in use after the first year, you will be able to clearly see the amounts to be counted as Carry Forward. Page 31 of 44

32 Appendix B Dealing with the System Check All Orders must be authorised or deleted Accounts Payable Orders & Commitments All Invoices must be authorised or deleted Accounts Payable Invoices/Credit Notes These receipts must be paid in. Accounts Receivable Receipts Journals must be posted or deleted. General Ledger Manual Journal Processing All Invoices must be authorised and printed or deleted AR Invoiced Income Invoices All Receipts must be printed and paid in AR Invoiced Income Receipts

33 Paying in slip not posted AR Invoiced Income Pay In Structure needs to be updated Page 12 Focus Budget Management Fund Allocation All funds must be CFR Apportioned within the Fund Allocation Screen check all the funds Tab 2 History

34 To clear Fund Allocations error Select Focus Budget Management Fund Allocation All Funds that have an allocation against them should have the same figures showing in the CFR Apportioned. In the example shown below Fund 06 has against it but nothing showing in the CFR Apportioned. Double click on the Fund line Select the History Tab

35 Double click on the relevant Fund that has not been CFR Apportioned. Type in the funds to be apportioned into the correct area. Click Save Rerun the Year End Systems Check. Page Down to the bottom of Page 2

36 The following message should now be viewable and you should be able to proceed with your year-end

37 Deleting/Editing Structure within FMS6 Take the opportunity of having just one financial year open within FMS to delete /edit redundant structure because once the new year is opened there will be little possibility of deleting any structure. Note for schools still using User Defined Reports: deleting Ledger Codes is only possible after they have been deleted from ALL User Defined Reports as this could invalidate those reports in past years. Print off a copy of the Chart of Accounts Listing Select: Reports General Ledger Setup Chart of Accounts Listing Identify all the ledger codes you want to remove from your system Page 37 of 44

38 The example above shows the Laundry Services and Staff Uniform Ledger Codes which are in the Other Staff Costs Cost Centre. This exercise will attempt to remove these two codes from FMS6. Rather than delete codes. Do not be tempted to rename and re-use Ledger Codes. The deletion of codes is systematic and should be carried out in the correct sequence. Page 38 of 44

39 Unlink Ledger Codes from the Consistent Financial Report (CFR) Select: Tools General Ledger Setup Tab 8 CFR Mapping If you are unsure where the Ledger Codes are mapped run a Validation Report Print a copy of the report. Highlight the CFR Table and Heading the relevant ledger codes are listed under. Extract from CFR Validation Report Page 39 of 44

40 E = Expenditure I = Income CI = Capital Income CE = Capital Expenditure Close the report after printing. Select the correct Table and CFR Heading Click on the eyeglass under Mapped Ledger Codes Search for the codes to be unlinked. Highlight the code and click on the - MINUS button NOTE If the minus button is greyed out it is because FMS6 has information that this linkage has been used and it is not possible to delete this link in this Financial Year. Page 40 of 44

41 Unlinking Ledger Codes from Cost Centre Select: Tools General Ledger Setup Tab 6 Cost Centre Ledger Links Click on the green minus button to unlink the codes. The codes selected will unlink from the system, however if the ledger code has been used in the last 12 months you will get a warning on the screen. It is recommended that you unlink ledger codes for redundant cost centres such as E01XXX Employees, I01XXX Funding etc. All Cost Centres will XXX in the code. By unlinking the ledger codes, you are streamlining your Chart of Accounts, you are reducing the possibility of miscoding and more importantly you are not wading through long redundant cost centres and ledger codes. etc., Once all the codes have been selected click Save The ledger code will no longer show as an option within the Cost Centre Allocations Details Screen Page 41 of 44

42 Deleting Redundant Cost Centres With the introduction of the 111GEN Cost Centre last year end, many Cost Centres became redundant, (all those with XXX in the code such as I01XXX Funding, E01XXX Employees, and E08XXX Other Staff Costs) should be deleted. Deletion is only possible once all Ledger Codes attached are unlinked. It is recommended that you then delete the redundant Cost Centres. Select: Tools General Ledger Setup Tab 2 Highlight the Cost Centre you want to delete and click the minus button The Cost Centre will disappear from the list on the left and the details on the right. Save. Page 42 of 44

43 Deleting Ledger Codes from FMS6 Not recommended Once you have unlinked the ledger codes from the Cost Centre they will no longer appear on the Cost Centre Definition screen. Should you want to delete the code from FMS6 entirely it may possible although FMS6 may have problems if it believes the code has been used elsewhere (perhaps against another Cost Centre or with another Fund. It is far better to unlink the codes only. Should you want to continue to delete ledger codes please contact the ICT Helpdesk for assistance Page 43 of 44

44 Notes Page 44 of 44