This chapter lists and defines key words used in this manual.

Accounting
<Accounting> is the methodical collection, categorization, and organized presentation of financial records.

General Ledger
<General Ledger> is the area of accounting where all accounting records are brought together to be classified and summarized. Financial statements are printed based on this data.

As used here, <general> means “pertaining to many areas.” General Ledger is often abbreviated <G/L> or <GL>.

<Ledger> means a book where accounting records are kept. (This term evolved from pre-computer times when accounting records were kept exclusively by hand in large books called <ledgers>).

General Ledger Account
A <General Ledger Account> summarizes and classifies financial activity of a certain kind. For example, you might have a General Ledger account called “telephone expenses” under which you categorized your telephone bills. The General Ledger account is often abbreviated <GL account>.

Typically, an independent business has one hundred or more GL accounts. In OpenPro.com accounting packages, each time any financial activity occurs in any area of accounting, the dollar amount is recorded under the appropriate GL account numbers.

Refer to the “Account Number Format” chapter in the Installation and System Guide (ISG) for complete information on General Ledger Account Numbers.

General Ledger Account Numbers
General Ledger account numbers are often formatted as cost centers, main accounts and sub accounts with each part or segment classifying transactions in different ways. OpenPro.com allows General Ledger account numbers to be configured in a variety of formats to suit the varying needs of different enterprises. Most examples used in the manuals are Dept-Main-Sub format. A more complete explanation of how to enter your desired setup is in the “Company File Maintenance” chapter; the most complete discussion of possible arrangements is in the ISG.

Cost centers are generally used to gather transactions by lines of authority and responsibility (such as division or department). Main accounts are used for primary designations (such as separating wage expense, rent expense, and tax expense). Sub accounts are used to track separate items in the same General Ledger main account (such as notes due to different banks).

The minimum format in OpenPro.com is a single segment account number consisting of a four digit main account number. When four segments are used, they are sequenced as two cost centers (such as Division and Department), main account and sub account. The full account number may not exceed seventeen characters including the characters in all the segments and required separators between segments. Except for the main account, the segments may be omitted or designated in length from 1 to 8 characters. The main account must be from 4 to 8 characters. Use of letters can be allowed or disallowed on a segment-bysegment basis.

The layout of examples in the manuals is normally Dept-Main-Sub. The setup is xxx–xxxxx–xxx (Dept of 3 digits, a dash, main of 5 letters and sub account of 3 letters). The manual clearly states when other account number layouts are used to illustrate a feature.

Chart of Accounts
Here <Chart> means <a list>. Your <Chart of Accounts> is the list of all of your G/L accounts.

Cost Center
A <Cost Center> is a part of your company (for instance, a department or a regional office) for which sales and/or expenses (and sometimes costs) can be calculated separately from the total sales and expenses of the whole company.

Cost centers also apply to sales. Tracking sales by cost center is a typical use for a company that has several sales offices. By making each sales office a cost center, you can separately track the sales performance of each office.

Refer to the Account Number Format chapter in the Installation and System Guide for complete information on Cost Centers.

Transactions
As used in accounting, <Transaction> means a business event involving money and goods or services. For example, a transaction occurs each time you gas up your car: you pay money in exchange for gasoline (goods).

Computer software deals primarily with business events that have already taken place, so <transaction> means the record of a completed business event involving money and goods or services.

The records of sales made and payments received are examples of transactions from the area of accounting called <Accounts Receivable>. The records of your purchases and the payments you make for such purchases are transactions from the accounting area called <Accounts Payable>. The records of quantities of goods received or sold are transactions from the area of accounting called <Inventory Control>.

In OpenPro.com software, when a transaction is entered into the system (into a file), it is often referred to as an <entry>.

Source (of a Transaction)
The <source> of a transaction (entry) is simply the accounting area where the entry originated (where it was first entered into the computer). For example, a salary expense typically starts in the area of accounting called <payroll>.

When hundreds (or even thousands) of entries are generated in other areas of accounting and then gathered together in G/L, it is helpful to know the source of each one. OpenPro.com G/L has, as part of each entry, an abbreviation representing the source of that entry.

Debit and Credits
In addition to handling a particular area of accounting, as described above (such as Accounts Receivable or Accounts Payable), each OpenPro.com package also keeps track of the effect of those entries on G/L. For example, when you make sales to, or receive payment from your customers, this activity affects not only A/R, but also G/L.

These entries must be recorded both in the proper A/R customer accounts and in G/L under the proper G/L account numbers.

The terms <debit> and <credit> refer to the types of entries that must be recorded in G/L accounts to accurately reflect the activity occurring in all accounting areas. (Refer to the Glossary in the Installation and System Guide for exact definitions of these terms.)

In A/R, a debit memo issued by you to a customer increases what that customer owes you, and a credit memo decreases what is owed. Unfortunately, debit does not always mean “an increase in an account” and credit does not always mean “a decrease in an account.” In some accounting areas, a debit increases a G/L account and a credit decreases a G/L account. In other areas, a debit decreases and a credit increases a G/L account.

This occurs because of the system called <double entry accounting> (also called <double entry bookkeeping>) which is the standard method of accounting used today.

Double Entry Accounting
The concept behind double entry accounting is that every entry (transaction) results in balancing debit and credit entries into the General Ledger.

Let’s look at the debits and credits involved when a typical independent business pays for goods or services bought earlier on credit:

• Debit: The disbursement (payment you make) results in a debit entry that decreases your <money owed others> account (usually called the <Accounts Payable> account). This is a <debit to Accounts Payable>.
• Credit: The payment also causes a credit entry that decreases one of your <cash on hand> accounts. This is a <credit to cash>.

So two entries are made into G/L that balance each other. These balancing entries form the basis of double entry accounting. If you or your accountant ever find your G/L accounts “out of balance,” it means that the proper balancing entries were not made.

No attempt is going to be made in this manual to teach you all about accounting, especially about what types of entries cause what accounts to be debited or credited. Unless you are an accountant or fully responsible for maintaining your company’s General Ledger, do not worry if you do not remember whether a debit increases or decreases a particular type of G/L account.

When using OpenPro.com accounting software, you will occasionally be asked to enter the G/L account to be debited or credited. Just refer to the appropriate chapter in this User Manual, where you will find exact instructions about what to enter.

Within OpenPro.com General Ledger, Accounts Receivable, Accounts Payable, Payroll, Order Entry, Job Cost, Inventory Control, Purchase Order, Check Reconciliation, and Sales Management Solutions, the software automatically takes care of all double entry accounting as you enter the required information on the screen.

Function
As used here, <Function> means one or more programs that accomplish a specific task.

Each selection on the main menu for an OpenPro.com package is a function.

When you select a function from a menu, one or more programs automatically execute, thereby allowing you to accomplish the task you selected.

Journals
A <Journal> is actually a report or book where the activity in some specific area of accounting is recorded on a regular basis (usually daily).

For example, in Accounts Receivable, there is a function that enables you to enter your cash receipts (the payments you receive). As part of that function, a report called the <Cash Receipts Journal> is printed, showing all the payments you received for that period of time (usually a day).

There are several different journal functions in the OpenPro.com G/L package.

General Journal
The <General Journal> is the G/L selection for entering miscellaneous entries into the system. It includes the entry program, as well as the program that prints the journal showing what entries you made.

Using the general journal function, you can make balanced entries consisting of debit or credit entries for any G/L accounts.

The general journal is used primarily to record entries that are prepared manually.

Distributions Journal
The <Distributions Journal> is the G/L selection used to collect entries from the journals in other OpenPro.com accounting packages.

For example, entries from the Sales Journal and Cash Receipts Journal in Accounts Receivable can be automatically fed into the distributions journal, so they do not need to be re-entered in G/L.

Using the distributions journal function, you can make a debit or credit entry for any G/L account. This is used primarily to enter adjustments and other miscellaneous entries.

The term <distributions journal> includes the entry program, as well as the program that interfaces to the other programs and the program that prints the journal showing what entries were made.

When the G/L package is used by itself (that is, not in conjunction with other OpenPro.com accounting packages), either the general journal function or the distributions journal function can be used to enter entries into the system.

Standard Journal
The <Standard Journal> is the G/L selection used to enter those entries which normally occur once in every accounting period.

Your rent is an example of a typical standard journal entry. It is an expense that occurs every month at a fixed rate.

In G/L, a standard journal entry that occurs every month can also have a variable amount. An example of this would be your electric bill.

All entries that are not automatically fed into G/L from other OpenPro.com packages enter the system through either the general journal selection, the distributions selection, or the standard journal selection. Entries in the standard journal remain on file until you delete them.

Journal Number
In G/L and other OpenPro.com packages, references are made to the <Journal Number> of a journal printout, or to the <Report Number> of a printed report.

Every report that is printed has its own report number. You will see this number on the very first printed line of the report.

This numbering system helps you identify your reports. Some reports, such as financial statements, allow you to suppress printing report numbers on the report.

Journal Codes
Every journal that is printed has a journal number. The journal number begins with a two-letter designation, or <Journal Code>. The journal code for the Distributions Journal is <GJ>. The journal code for the A/P Check Register in the Accounts Payable package is <AK>.

The journal codes are listed in the “Source Cross Reference” chapter.

The journal number is the two-letter journal code, followed by a four-digit report number. For example, if an entry has a journal number of GJ0126, this means that the entry can be found on the Distributions Register that has report number 0126.

The journal number is kept (stored) along with the entry, and tells you the exact journal on which the entry was printed.

Date Sensitivity
In OpenPro.com G/L, you tell the computer what the starting and ending dates are for your current accounting period (the period you are processing), as well as the current reporting period. Thereafter, many of the selections in the package will automatically ignore any entries that fall outside your current accounting period.

You can enter General Journal and Distributions Journal entries dated outside your current period for the purpose of adjustment.

Trial Balance
A <Trial Balance> is a trial run (a test run) made before printing the actual financial statements.

The G/L Trial Balance Report shows all the entries for one or more accounts within one or more accounting periods. (You choose which accounts and accounting periods to print.)

The Trial Balance Report (and its cousins, the Working Trial Balance and the Spreadsheet Extract) are often used by an accountant to figure out what adjusting entries need to be made before the final copy of your financial statements can be printed.

Financial Statements
These are the summarized reports, produced by the G/L package, which state how your company performed financially over a specified period of time.

Many businesses pay their accountants to prepare financial statements every quarter (three months). Virtually all businesses prepare some kind of financial statements at least once a year.

The <Operating Statement> (also called <Income Statement>, <Profit and Loss Statement> or <P & L>) is one of the most important financial statements. It typically shows your gross revenues, the direct costs of the goods or services you sold to get such revenues, your other operating expenses, your costs, and your net income.

The <Balance Sheet> is another important financial statement. Simply stated, your balance sheet shows your assets and liabilities at a particular point in time, and therefore shows your net worth at that time.

With a little help from your accountant, you can tell a lot about the financial condition of your company from your current financial statements.

Integrated
When a set of accounting packages is <Integrated>, any information generated in one area that is needed in another area is automatically supplied to that other area.

You do not have to enter the information twice.

OpenPro.com accounting software is fully integrated (with the exception of Check Reconciliation, or C/R). When G/L is used with other OpenPro.com packages, any information recorded in those other packages that G/L should know about can be automatically transferred to G/L.

Data Organization
The information you enter into your computer is stored on your disk. In order for computer programs to be able to locate specific pieces of data (within large masses of data), and to be able to process data logically, data must be organized in some predictable way. OpenPro.com accounting software organizes your data for you automatically as it stores it on your disk.

There are five terms you should understand about the way the data is organized:

1. Character: A <character> is any letter, number, or other symbol you can type on your computer keyboard.
2. Field: A <field> is one or more characters representing a single piece of data. For example, an account number, a date, and a dollar amount are all fields.
3. Record: A <record> is a group of one or more related fields. For example, the fields representing the account number, the amount, and the distribution date might be grouped together into a record called the <entry record>.
4. Entry: A record in a data file is often referred to as an <entry>.
5. Data File: A <data file> is a group of one or more related records. A data file is often referred to simply as a <file>.

The General Journal File in General Ledger is an example of a data file. Such a file is made up of several records, each of which contains the account number, amount, etc. for one entry.

Each file is kept separate from other files on the disk.

There are other types of files in addition to data files. For example, programs are stored on the disk as <program files>. However, references to <file> in this User Guide mean <data file> unless specifically stated otherwise.

Post
To <Post> means to take entries from a temporary file and move them to a permanent file (where other entries probably already exist). For example, in G/L, entries are initially entered into the temporary General Journal File. After entries have been entered and verified as correct, they are posted to the more permanent General Ledger File.

Often, during entry posting, information in other data files is also updated. For example, when sales from Accounts Receivable are posted, the account balance and historical sales figures in the Customer File are also updated.

Alphanumeric
When the manual refers to <alphanumeric>, it means letters of the alphabet, numerals (numbers), special symbols (*, &, $, etc.) or any combination of all three kinds. In contrast, <numeric> (or <digits>), means only numbers.

Multi-Company
<Multi-Company> refers to the capability to do accounting functions for multiple companies with the same set of software. A user wanting to do accounting functions for more than one company on OpenPro.com packages can use the Define Multiple Companies selection.

Company Consolidation
<Company Consolidation> is the action of summarizing the accounting activity of several companies into a whole, as though they were one company. For example, the entries from companies A, B, and C could be summarized into company X, and an overall set of financial statements produced for <company X> (the consolidation company).

Help
<Help> refers to descriptions of functions that appear on your screen by pressing a designated key. The <Help> text gives you a quick reference to the highlights of functions while you are running them. Not all functions have on-line help available. In these cases, you will need to refer to the user guide.

Spool
SPOOL is a computer word meaning <Save Printer Output Off-Line>. Spooling is a technique that allows a report to be printed at a later time. Instead of reports going directly to a printer, they are saved as a disk file (which is usually a lot faster). When a printer is available, all or some saved reports can be printed in one long run (for example, overnight).

Accounting Periods
Using the <Accounting Periods> selection, you can define a fiscal year containing from one to thirteen accounting periods. You can also define a separate period for use in reporting purposes.

G/L Account Number Format
Companies with multiple sales departments or branches often require separate Operating Statements for each <cost center>.

Refer to the Installation and System Guide for detailed information.

Chart of Accounts
In addition to the G/L account number and account description, the Chart of Accounts record contains various codes that govern the handling of the account throughout the system.

You can print the Chart of Accounts List at any time.

Budgets
For each account entered in the Chart of Accounts you may create multiple budget entries for multiple years. There is no limit to the numbers of budget types.

You may print the budget entries at any time.

Comparatives
Comparatives refer to financial data from prior years. You may have an unlimited number of years of historical data stored.

You may print the comparative entries at any time.

General Journal Entries
In the general journal, you can make new entries (enter transactions), change or delete existing entries, and post entries to the General Ledger Transaction File. General journal entries can be made in such a way that they will be automatically reversed next period (for accrual purposes).

As an aid in the entry process, each entry is handled so that its balance is known as you insert, edit and delete lines in the locations you desire. You can print the General Journal Entry Edit List before posting.

When general journal entries are posted to the General Ledger Transaction File, the General Journal Entry Register is automatically printed.

Distributions Journal Entries
In the distributions journal, you can make new entries (enter transactions), change or delete existing entries, and post entries to the General Ledger Transaction File.

Distributions journal entries can be made in such a way that they will be automatically reversed next period (for accrual purposes).

As an aid in the editing process, you can print the Distributions Edit List before posting. It can be printed in order by account number or in the order the entries were made.

When distributions journal entries are posted to the General Ledger Transaction File, the Distributions Register is automatically printed.

Recurring Journal Entries
This selection is similar to standard journal entries, but more flexible, since it allows you to set up journal entries that recur weekly, quarterly, etc., instead of just once per accounting period.

It also saves you time because if you want to do an allocation to a set of accounts, you can distribute by percentage. (In the standard journal, you must distribute one transaction at a time.)

You can set a time limit on a recurring entry. You can also limit recurring entries in terms of the number of times used.

View Accounts
The <View Accounts> selection allows all entries for a selected account and within a specified date range to be displayed on the computer monitor.

Source Cross Reference
The <Source Cross Reference> Report shows all entries for any time period, for one or more sources and/or one or more journal numbers. This report prints detail (individual) entries in order by source or by journal number, whichever you select.

You can always associate a journal number with a printed, physical document,and (provided you have not compressed the General Ledger) you can reconstruct a lost journal printout by using this selection. To reconstruct, specify all sources and dates for a particular journal number.

Since you select the ranges of starting and ending source codes, starting and ending journal numbers, and starting and ending dates, this report is a very powerful tool for identifying unusual transactions and their origins.

As in nearly all OpenPro.com reports, you can display this report on your screen.

This allows you to rapidly review large numbers of entries within a selected range to isolate any problems.

Financial Statement Formats
With OpenPro.com General Ledger, you can design your own financial statements.

Layout functions allow you to format financial statements by entering the relative position of titles, headings, accounts, text lines, sub-totals, totals, etc. The userdefined formats are saved on disk and can be easily added to, changed, or deleted whenever necessary. <Wild-carding> and account ranges are allowed in financial statement layouts.

A Financial Statement Specifications List and sample financial statements (showing statements as they will print, but without real dollar amounts) may be printed.

Financial Statement Printing
OpenPro.com General Ledger prints the user-formatted financial statements on request. These include the Operating Statement, Balance Sheet, Supporting Schedules, Expanded Cash Flow Statement (FASB 95 Cash Flow Statement), and the Source and Application of Funds (SAF) Reports: Statement of Cash Flow, Components of Working Capital, and Changes in Financial Position.

Financial statements may be printed at any time, for any accounting period that you define, and for a set of cost centers that you define.

Budget and/or comparative figures may be shown on selected financial statements along with budget or comparative <variances>. A <variance> is the difference between the current amount and the budgeted amount (budget variance), or the difference between the current amount and last year’s amount (comparative variance).

User-defined notes, disclaimers, etc., may also be printed on any of the financial statements.

Accounting Ratios
User-defined accounting ratios can be set up and calculated. These can be standard ratios or customized to meet specific business needs.

Year-To-Date Entries
If your system has sufficient disk storage capacity, all detail entries (transactions) for the year may be retained. When detail is stored for the entire year, the Trial Balance Report may be printed showing all such detail.

However, if disk space is not available, detail may be compressed (summarized) on request. The Summarize selection totals and compresses entries, either by date or by accounting period, at the user’s option.

Date sensitivity is always maintained during a compression, allowing reports (without detail) and financial statements to be re-run for prior periods, even after compression.

Year End Procedure
The Close a Year selection automatically clears all operating statement account activity and consolidates balance sheet entries into one beginning balance entry for the New Year. This procedure also rolls the year-ending account totals over into the last-year comparative figures.

Interface to Other OpenPro.com Systems
OpenPro.com’s Accounts Receivable, Accounts Payable, Payroll, Check Reconciliation, Inventory Control, and/or Job Cost systems may be interfaced to the General Ledger, provided each package interfaced is the same version number, running on the same machine (computer).

Password Protection
You have the option to specify that passwords are required. A password is a unique code you assign to each individual using your OpenPro.com software.

When passwords are required, each potential user must first enter a valid password before he or she will be enabled to use a protected selection.

Data Integrity Checks
A data integrity check compares the actual numbers in the system to the calculated or projected numbers. If these numbers do not match, you are warned that information might have been lost due to a machine or power failure. By running this function at the start or end of the day, you can detect several possible types of data file corruption (sometimes due to hardware or operating system errors).

File Recovery Procedure
This selection provides the capacity to recover corrupted data files. You can also use it to convert important data files to a format that can be easily interfaced to common database and word processing packages.

Printers
You can easily configure your OpenPro.com software to work with any of the most popular printers. Additionally, instructions are given to allow you to configure the software to use virtually on any other printer.

Loan Payment Calculation
This general-purpose program is useful to accountants and is included for your convenience, although it is not an integral part of General Ledger. The program is described in the “Calculate Loan Payments” chapter.

You do not need any Chart of Accounts information or Financial Statement Layouts to calculate loans, but you are required to have entered the Company File information.

Upgrading from Earlier Versions
The necessary functions and instructions to enable you to upgrade from an earlier version of this same OpenPro.com package are described in the Installation and System Guide.

Features of OpenPro.com General Ledger
The General Ledger package provides the following features:

• User-defined accounting ratios can be set up and calculated on financial statements. These can be standard accounting ratios or customized to meet specific business needs.
• More flexible copying of Chart of Accounts between companies is provided.
• The Valid G/L Accounts File can be automatically re-initialized prior to copying the Chart of Accounts File to the Valid G/L Account File (and vice versa).
• Unlimited date and time stamped notes can be attached to Chart of Account records.
• A new screen for Correcting Entries has been added.
• For general journal and standard journal entry, echoing of the source, reference and document number of the previous entry can be controlled; i.e., the user can specify for each field whether it is to be redisplayed.
• Up to ten lines of notes can be entered for a general journal entry. These notes will be printed on the register.
• Recurring General Ledger transactions are now included. These allow for allocations to accounts on a dollar or percentage basis.
• Layouts can be copied from other companies.
• The date, time and/or report number may optionally be printed on financial statements.
• Multiple separate ratios can be printed on financial statements.
• Financial statements can be printed for a set of sub-accounts.
• For rounded financial statements, the user may <bury> the rounding error at any specified point in the statement.
• Account ranges are allowed in financial statement layouts.
• Literals and text for financial statements can be automatically centered.
• Financial statement layout verification is provided to ensure that the accounts on a layout are correct for the type of layout. It also ensures that all accounts in the Chart of Accounts that should appear on the balance sheet or cost and loss layouts do actually appear on these layouts. This ensures that when you select to print a financial report, all accounts related to your selection, e.g., cost and loss and/or balance sheet, will be printed.
• Handles up to thirteen accounting periods.
• Supports multiple cost centers.
• Supports multiple companies.
• Produces an overall set of financial statements from a consolidation of multiple companies.
• Allows reports to be stored on disk to save computer time, then printed later at your convenience.
• Allows use of multiple printers.
• Provides maintenance and a listing of the Chart of Accounts File.
• Allows general journal entering, editing, and posting, with edit list and journal.
• Allows standard journal entering, editing, and posting, with edit list and journal.
• Recurring general journal entries allow for automatic distribution by percentage or allocation.
• Prints the Working Trial Balance and Trial Balance Reports.
• Allows on-line G/L account detail inquiry.
• Prints the Source Cross Reference (for audit trails).
• Prints the financial statements in flexible formats that you design.
• Financial statements can be printed for a set of cost centers.
• <Wild-carding> and account ranges are allowed in financial statement layouts.
• Key accounting ratios can be calculated (such as <Current Ratio>). Userdefined accounting ratios can also be set up.
• Allows you to keep entry detail for the year if disk space is available, and has
• flexible year-end closing procedure.
• Contains a loan amortization program that gives you information about fixed rate loans.
• Includes password protection and data-integrity checks.
• May be used either independently or interfaced to the OpenPro.com Accounts Receivable, Accounts Payable, Payroll, Inventory Control, and/or Job Cost systems.
• Has <Help> (highlights of functions) built into the software.

The Close a Year selection enables you to view your total debits and credits for a certain year and zero your balances at the end of your accounting year as part of the closing procedure. It consists of two functions:

1. Print closing report – This function is used to print the Year End Closing Report, which shows the net profit/loss entries that will be made by Post closing entries when it is run. This report may be printed to verify the net profit for the year prior to closing G/L so that any final corrections can be made.
2. Post closing entries – This function is used to close the year. It performs the actions needed to close the fiscal year. These actions are described in detail later in this chapter.

OpenPro can run financial reports for all prior years; we process the year end transactions differently than many other systems.

The way OpenPro processes the year end closing transactions is as follows:

1. For the year you are closing, no changes will be made and no transactions are being processed.
2. For the new year, we process a beginning balance for the Balance Sheet accounts.
3. In addition, for the new year, we process a beginning balance transaction for the Profit and Loss accounts, but the first day of the new year we offset that beginning balance. So the net effect is zeroed out for the new year.

OpenPro also allows the capability to make adjustments for prior years and recalculate the new beginning balance for the new year.

If you are not ready to close the year
It often occurs that you must start your new fiscal year before the old fiscal year is closed. This occurs, for example, if your fiscal year ends on June 30th of the year, but the final adjusting entries are not made available to you until August. In this case, you must start your new fiscal year before closing the previous year.

If you are not ready to close your General Ledger at fiscal year end, you can take the following steps so that you can process information for the new year.

Actions performed by Post closing entries
The following is a list of the actions performed by Post closing entries:

1. The periods shown on the right hand side of the screen in Accounting Periods are moved to the left hand side of the screen. Accounting periods are generated for the new <following> fiscal year and are shown on the right hand side of the screen. The fiscal year is set to be the one shown on the left hand side of the screen. The entry period and reporting period both are set to be the first period.
2. It sets the <comparative amounts> for each G/L account. After Post closing entries is run, the comparatives for an account will contain the balances for that account for each period of the fiscal year just closed. When comparative financial statements are run in the new year, you will then be able to compare new year balances against comparatives from the fiscal year just closed. The <comparative amounts> stored by Post closing entries are called the <new comparatives> throughout this chapter. They are the new comparatives that are set up for use in the new fiscal year, although their amounts correspond to the account balances from the prior year.
3. It creates balance forward entries for all balance sheet accounts. The date for these entries is the first day of the new fiscal year. It also creates balance forward entries for all the Profit and Loss Accounts with beginning balance entries.
4. It automatically posts the net profit/loss to the retained earnings account entered in Rules Setup, Business Rules Account.
5. It prints the Year End Closing Register. As mentioned at the beginning of this chapter, you may print the Year End Closing Report prior to running Post closing entries in order to see the information that will be printed on the Year End Closing Register when Post closing entries is actually run.

OpenPro.com recommends that before you select this function, you:

BACKUP THE SYSTEM BEFORE RUNNING YEAR END.

1. Proceed with the recalculation process for the summary transactions. (see Chapter 4)
2. Print all closing financial statements, Balance Sheets, Profit and Loss, including a detailed year-end Trial Balance. Verify that the balances are what you expected.
3. Create the new fiscal period record for the new year. Verify the year you want to close has all the periods checked off and closed.
4. Make backup copies of all G/L data files.

You will then have a permanent record of the activity for the fiscal year.

Select GL Reports from the G/L menu, and then select To close a year:

From this screen, choose the fiscal year that you wish to close. You may also wish to select a location, but this is optional.

This will give you readout of your fiscal activity that you can print before closing the year completely.

This selection prints the Year End Closing Report, which shows what net profit /loss entries Post closing entries will make. Print closing report does not perform any other function except showing what will occur when Post closing entries is run. Close a year can be run many times after the initial process, the difference is the second time you can only recalculate the beginning balances for the new year.

You will not be able to continue if:

• Any entries exist in the G/L Integrated File (which means they have not yet been posted to the General Ledger Postings), or the new year has not been created, or all the monthly buckets are not closed for the year you are closing.

The report is printed in two sections. The first section is titled <Closing Entries> and will show all Operating Statement accounts with the amount totals to be posted.

The following are the results of running Post closing entries:

1. The Accounting Period File has been updated for the new year. (You may need to update the current period and reporting period at this point, by using Accounting periods, if there were delays in closing your fiscal year.)
2. The comparative amounts for each account in the Chart of Accounts are updated to be the ending balances for the periods of the fiscal year just closed.
3. All entries from the fiscal year just closed have been cleared from the General Ledger Transaction File. (Entries made for the new year are left unchanged.)
4. Balance forward entries for all balance sheet accounts have been created. The date for these entries is the last day of the fiscal year just closed.
5. A net profit (loss) entry has been made to the retained earnings account entered in Control information. If <Varies by cost center> was entered for the retained earnings account, then individual entries have been made for each of the cost centers of the retained earnings account.

The Working Trial Balance selection enables you to print the Working Trial Balance, which is used in closing procedures for an accounting period.

When the Year End closing is complete and all the financial statements look good for the prior year, a G/L entry transaction must be entered to move the Current Retained earning balance to a Prior Years Retained earnings account. If this is not done, your balance sheet for the new year will be off by the amount in Retained Earnings.

The Year End back out procedure allows you to redo a year end. Prior to using this feature, you should first redo the journal entry for retained earnings. The back out process will recalculate the year, zero the beginning balance, and create a reversing entry.

Under the General Ledger, select the year you wish to back out then click Enter.

Once the process is complete, a status of what has been completed will be displayed.

As stated, the year end back out will zero the beginning balance for the year after which the back out has been done.

The Summarize General Ledger selection enables you to summarize the entries in the General Ledger Transaction file, either by date or by period (depending on which method you specified in Chart of Accounts).

This function should be run before running your year end processing, but if you are just starting out and loading data, you may need to run this to summarize the detail entries loaded into the summary tables. These tables are used for reporting. This procedure can run as many times are you want.

Select under reports GL Summary RESET from the G/L main menu. The following screen appears:

From here you are able to view all of the accounts with just a summary instead of with full detail. You can print a summary of accounts by clicking the print button located at the top option bar of the screen.

You should only select the Year and not run it for a specific period or location.

When completed, the number of records updated will display. After running this you may also need to run the Recalculate beginning balance process for this year.

To do this just rerun the year end close process. The software will warn you that the year end process has already been complete and it will only recalculate the beginning balances for the new year.

Here is an example for running the close a year process to recalculate the beginning balances.

[Last Review Date January 2018]

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