Tips to Prepare for Quarter-End and Year-End
Melissa Wood
Consultant
What We’ll Cover
1. Tying out A/P
2. Tying out A/R
3. Tying out I/N
4. Work In Progress
5. Managing Jobs and PMs
6. Quarterly Payroll
7. Closing a Year
Tips to Prepare for Quarter-End and Year-End
Are Your Financials Correct?
1. Do you’re A/P Aging, A/R Aging, and Inventory Job Summary Report balances tie to your Balance Sheet?
a. Have you done an inventory count and updated balances?
2. Is your Work in Progress accurate?
a. Are all your costs, change orders, and contracts up-to-date and posted?
b. Has your overhead/burden been analyzed and allocated?
c.
Are you over billed or under billed
i. How does this affect your profit?
3. Payroll Quarterly Reports
a. 941
b. State & Local
c.
SUTA
4. Are your bank statements reconciled?
5. Do you have to book any accrual entries?
a. Payroll
b. WIP
6. Did you purchase any equipment, fixed assets or real property this year?
7. Are all of your payroll liabilities cleared out?
a. Was something posted to an expense account that should have hit a liability account on the
Balance Sheet?
8. Does your job cost tie out to general ledger?
a. G/L account job cost settings
b. Gotcha programs
c.
Journals – job cost setting
d. Process reviews
e. J/C to G/L query
9. Is all of your Bad Debt written off?
a. A/P or A/R that you won’t be paying or collecting.
10. Closing Period to Prevent Any Entries
11. Year-End Processing
1. Closing the Year
2. Creating the Year End Adjusting Entries / Journal Entry
1
Tying out Accounts Payable
Make sure that you use the same As of dates and make sure totals tie out.
1. A/P Aging Report
o
Choose “Summary” or “Detail”
2. Balance Sheet
o
Disable the Accounts with Zero Balance checkbox.
o
Enable the Show Account Numbers checkbox.
2
A/P Totals to Tie Out
Balance Sheet
3
Tying out Accounts Receivable
Make sure that you use the same As of dates and make sure totals tie out.
o
A/R Contract Receivables Report
o
Summary
o
Balance Sheet

Disable the Accounts with Zero Balance

Enable the Show Account Numbers checkbox.
4
A/R Totals Tie Out
Balance Sheet
5
Tie out Inventory
Inventory Summary Report
6
Creating a Physical Count Worksheet
Entering Physical Counts
7
Work In Progress
5 Things that Change WIP
1. Job Status (Inactive, Active, Closed or Overhead) – only Active Jobs should show on WIP
2. Contract Amount – Have all Approved Change Orders been entered?
3. Estimate/Budgets – Are the Original Summary Estimated Costs Correct
a. Have you entered all Estimated CO’s to reflect Current Estimated Costs?
4. Are all Billings to Date Correct and Posted?
5. Are all Costs to Date Correct and Indirect Expense Allocated?
How to Check if it is Correct
o
Are there any jobs that are severely over or under billed?
o
o
If so, look to the 5 things above and make sure they are correct
Are there any jobs that are show over 100% complete?
o
If they are complete, you need to do an estimated CO to make the estimate match the costs
Exercise: Sample Estimated CO
8
Managing Your Jobs and PMs
Look for the negatives…..then drill down for details or get on the phone and collect those receivables.
Work on adjusting contracts with approved COs, budgets (revised costs) with estimated Cos, or get jobs billed to
correct percent. If a job shows more than 100% complete and should be 100%, create an estimated change order
to make it match the costs to date.
9
Three Ways to do WIP in FOUNDATION
1. Customize a WIP in FOUNDATION
o
o
Pro

Customized

Fast to set up and run
Con

Calculate Earned Revenue for Prior Period, such as Previous or YTD (if you need this, get an
Excel WIP created)
2. Use FOUNDATION’S Canned Over/Under Billing Report
o
Pro
 Does the entry for you
o
Con
 Can’t customize the report
 Need to keep a copy of the report to know what the entry was, because it automatically
subtracts the current entry from the prior entry and only posts the difference.
b
c
d
e
3. Sample WIP in an Excel Query
o
o
Pro

Very few (if any) limitations

Automated and easy to use

Easy to send to a CPA in an Excel format
Con

May need to hire a consultant to assist you in creating/modifying it
10
WIP Adjustments
Choose a method
1. Post from Over/Under Report (if using FOUNDATION’S canned WIP Report)
a. Pro
i. Does the entry for you
b. Con
i. Need to keep a copy of the report to know what the entry was, because it automatically
subtracts the current entry from the prior entry and only posts the difference.
2. Create a WIP Accrual Journal (if using a Custom WIP or Excel Query WIP)
a. Pro
i. You control the entry
ii. You have a good audit trail
iii. It will automatically reverse itself out the 1st day of the next month (if journal is set up right)
b. Con
i. You need to do the entry yourself
11
Quarterly Payroll
The best reports to run for Quarterly Payroll Processing
o
Payroll Wage and Tax Report – This is a report that gives you totals (per period) of everything that hits
an employee’s check all the way through net pay, including but not limited to the employer’s portion and
contributions. This report is a good report to double check prior to printing W2s.
12
o
Print 941 (3 things that it does)
•
Make sure you run this report based on date ranges (on check date).
1. Prints your 941 forms.
2. Tells you your total payroll liability summary by date.
3. Posts your journal entry to debit P/R liabilities and credit cash.
13
o
Summary 941 – This format show what you “should have” paid for the 941. This will show summary by
pay period. It is a good idea to look at this in a “date range” to make sure that you don’t miss any
payments for a correction or layoff check.
Post the journal entry for liability for federal and FICA. This will debit liability and credit cash.
14
Running State & Local Taxes
Does not post the journal entry. The entry will need to be entered manually.
o
Look at the Balance Sheet.
o
Make sure liabilities are cleared each period.
Closing Periods
FOUNDATION allows you to choose between doing a soft close or a hard close.
o
A hard close would be setting the control files to “Prevent”
o
A soft close would be setting the control files to “Warn”
Modify your control files.
•
•
In the control files for A/P, A/R. I/N, P/R, E/Q, change the control file settings to the “Open period.” It is a
good idea to do this when you close a period to prevent users from making entries to it.
o
Make sure that the security is set up so that users cannot change the control file settings.
o
Never use journal entries to fix these modules. Rather use the programs in these module to make
adjustments so the G/L will always tie out to the module.
You can reopen a period and make changes fairly easily by changing the settings, making the entry, and
changing the settings back.
15
Closing a Year
Generating a year-end close is easy.
1. From the Main Menu, go to General Ledger > Daily > Generate Year End Close.
2. Enter a date range in the Fiscal Year and To fields.
3. In the Accounts to Close fields, select your Beginning Income Statement account, Ending Income
Statement account, and Retained Earnings account.
4. Click on the “Report” tab.
o
This will create a year-end journal entry for you to post.
o
You need to post the entry, then go open the Create G/L Journal Entry window, pick the journal,
and post the entry.
o
Make sure you set your control file dates to “Prevent” once you are finished with the year-end
entries.
16
Tying Out Job Cost to G/L
•
The total job income should tie to the total billed that period.
•
The total job cost should tie to the total cost that period
o
Discrepancies usually occur in payroll
•
Run the G/L History for direct jobs cost accounts (group by job) and compare it to job cost and the billing
to date summary in J/C
•
Filtering & Reporting Tricks
o
Filter by job
o
Filter by journal
o
Job cost that hit G/L journal
o
Indirect & G&A accounts that hit jobs

•
Group by job
J/C to G/L Query
Take note of Gotcha programs. Gotcha programs are programs that may or may not hit the J/C, G/L or both,
causing your G/L and J/C to not tie out. They are as follows:
•
G/L Journals – Can be set up to not hit the J/C and G/L. Do not change settings on canned journals.
•
Job Journal Entry in J/C – Does not hit G/L
•
Job Transfer in J/C – Does not hit G/L
•
Cash History Entry – Does not hit G/L
Note: Be aware of G/L Account Require Job Costing settings. All P/R-related accounts on the Income Statement
need to be set up to require job costing at minimum to minimize errors in the J/C to G/L tie outs.
17