Create Mid-Year Closures
The procedure allows creating new mid-year balance sheet simulations.
The source of the starting data is always the General Ledger at the time of creating the closure itself: the program retrieves the balances of the various detail accounts, according to the closure creation parameters set in this form, to then allow the off-balance addition of all accruals, deferred charge, depreciations, and manual records to arrive at a balance sheet simulation including the necessary adjustments and corrections. The operation has no effect on general ledger data for the purpose of year-end closure: the mid-year closures module is, in fact, managed in database tables completely separate from general ledger.
Tab General
Flag Select data for department: if set, the previous field for the division becomes a filter to retrieve only the data of the set division from accounting.
Accounting year: the reference year of the data, used to identify the default accounts for adjustment records and the related accounting periods.
Exclude causal: in the case of retrieving data for an entire closed fiscal year, allows excluding closure account records and thus obtaining the financial data for the year.
Area: the field is visible only in companies that manage Controlling. The area of Finals to associate with the dataset being processed will be selected.
Section Retrieve of Asset Values
The flag for Retrieve of movements with patrimonial nature, which is present by default, enables the underlying filter section. With this option, the ERP will also include the balances of the detail accounts linked to account types that have the flag Active Patrimonial or Passive Assets in the mid-year closure.
The section of filters for registration date and maturity date allows defining the date ranges that will be used to retrieve asset data from the records of the set period.
In particular, if the closure and re-opening of accounts have not yet been registered in accounting, the start date must be retrodated to the last account opening date recorded in accounting, to ensure a correct asset figure.
It should be noted that, in this case, there will be a difference between the asset balance and the economic balance of the current year, corresponding to the profit/loss of the previous year not yet recorded in the general ledger closure/re-opening: upon launching the creation, Fluentis will ask if you want to value this difference on the predefined profit or loss accounts in the accounting parameters, obtaining a balanced record; whereas if this option is not used, there will be an imbalance in the record, and thus, for the proper execution of the closure operation itself, the template must allow saving imbalanced records.
If the closure does not foresee the asset retrieve, again, the registration of mid-year closure (of the economic section only) will imbalance for the profit/loss of the period.
Section **Retrieve of Economic Values **
The flag for Retrieve of movements with economic nature, which is present by default, enables the underlying filter section. With this option, the balances of the detail accounts linked to account types that have the flag Economic Costs or Economic Revenues are included in the mid-year closure.
The section of filters for registration date, maturity, and document allows defining the ranges of dates that will be used to retrieve data from the records of the set period.
The document date range, which is not set by default, is usually not specified: not all ledger records have document dates in the header (typically only the records for purchase/sale invoices).
If the closure does not foresee the economic recovery, the registration of the interim closure (of the asset section only) will imbalance for the profit/loss of the period.
Section Data for accounts closing
The section presents the identifying elements that will be attributed to this balance sheet simulation.
Temp. of acc. closing: it is the template to be used to create the balance retrieve record. It is noted that this template must have the flags for CDC/CDP/projects so that these elements are considered in the mid-year closure itself.
Closed date: it is the creation date of this simulation, which will be used as the date of the off-balance closure record and for other records. It has no particular significance.
Closing Number: it is the progressive number of the closure, automatically proposed by the system.
Closing descr.: it is the description that will appear in all screens of the Mid-Year Closures module, in the Balance Sheet and Budget modules. It is advisable to clearly describe the date ranges set so that one understands the simulated period when selecting the closure in the various procedures in the Controlling area.
Economic Competence From/To: this date range is mandatory to proceed with the creation of the mid-year closure. It indicates the period of economic competence of interest: it will thus be taken as a reference for the calculation of adjustment/integration records, for the calculation of the retrieve of the current period's depreciations, and generally for the various downstream procedures. To exemplify, if the records of the first half of the year X have been retrieved and the same semester has been entered as the range of economic competence, the adjustment procedures will check if there are any accounting lines with competence ranges outside of this semester in order to record their related deferral.
Section Closure Options
Closure for Job Order: with this flag, the program will create an mid-year closure record for each sales order that was recorded in the ledger records of the set filter period. It is noted that the mid-year closure template must foresee the management of the job orders (projects) to manage their data.
Consider temporary recordings: with this flag, the retrieve of data from accounting will also consider ledger records with the status 'temporary'.
Calculated Values
This section offers the total asset/economic values calculated from the first closure record made.
(with flag Closure for Job Order, this section will only display data from the first identified order in the period).
Rectification and Integrations
The section allows managing automatically, at the end of the mid-year data retrieve record, the related adjustment and integration records.
This type of adjustment records is done automatically only for movements of the economic detail accounts linked to an account type that has the Service flag set.
The reference for adjustments/integrations is to the competence date range entered in the journal records (and in the cost/profit centers for the analytical part).
Automatic adjusting entry: setting the flag will activate the section for automatic adjustments. It is necessary to set the template that will identify the operation. Also here, to adjust the CDC/CDP movements, it will be necessary for the template to foresee their management.
The recommended settings are to use the group by registration option and, above all, the solar calendar.
The detail accounts of deferral to be used will be those entered in the chart of accounts corresponding to the individual cost/revenue detail account or the generic detail account entered in the accounting parameters for the year of the mid-year closure itself.
This flag automatically creates what the user can also manage separately after processing the closure balance in the dedicated Adjustment Records procedure always referred to the mid-year closures menu (procedure).
Automatic integration entry: setting the flag will activate the section for automatic integrations. It is necessary to set the template that will identify the operation and the accrual start date.
Also here, to integrate the CDC/CDP movements, it will be necessary for the template to foresee their management.
The default setup of the solar calendar is what is recommended to use.
With this flag, the program will verify, starting from the Accrual start date for ledger integration, the cost/revenue lines present in accounting and not included in the closure (i.e., records outside the set registration/accrual dates), to create accruals for the days within the set acrrual date ranges for the closure.
The detail accounts of accrual to be used will be those entered in the chart of accounts corresponding to the individual cost/revenue detail account or the generic detail account entered in the accounting parameters for the year of the mid-year closure itself. If the cost/revenue has economic competence entirely included in the interest range of the closure and is in a ledger record with the header detail account valued, then Fluentis assumes it is an record of an invoice to be received/sent and will use these detail accounts taking them from the customer/supplier register or the accounting parameters of the selected year, instead of the accrual detail account.
This flag automatically creates what the user can also manage separately after processing the closure balances in the dedicated Integration Records procedure.
Particular attention must be given to the accrual start date to be set.
Normally, this date will be set equal to the date of the last account opening recorded in accounting.
Example: if we are creating the closure for the first quarter of the year, the date range for the economic section will typically be 01/01/year X – 03/31/year X, and if the account re-opening of the previous year is present, then within this range there will directly be the transfer to the cost/revenue of the accruals recorded in the 'year X-1' balance and therefore the start date for the integrations will be set as 01/01/year X so that the software checks if there are records with competence in the previous quarter after 03/31.
If the re-opening is NOT present, however, it will be necessary to set the start date as 01/01/year X-1 to include as well, for competence, the movements that would have been subject to re-opening (accruals and deferrals) from the previous year.
The controlling module operates in a more flexible manner, in some situations, compared to the administrative module. In fact, it is able to automatically adjust any cost or revenue (with compatible account types) for either economic competence shares in the past or future, as it proceeds to monthly allocate the costs/revenues and thus automatically removes values before and after the range of closure. For instance, if the cost recorded in year X has partial (or total) competence in year X-1, processing the period calculations on the actual data of the closure of year X will still only consider the requested competence period.
Particular attention should be given to the management of adjustments made in the administrative module. It is recommended to perform the calculation and posting of adjustments and the closure and re-opening of accounts with re-opening adjustment through the automatic procedures, avoiding manual records.
The automatic procedure imposes, in fact, on the re-opening records of adjustments the date equal to the original record subject to correction and the economic competence of that record equal to year X-1. This way, it avoids that when processing period closures of year X, the software calculates further adjustments, already having the correct competence result in the balance of year X (or mid-year period of year X) due to the proper re-opening of the previous adjustment.
Fixed Assets Depreciation Retrieve
The section allows automatically managing, at the end of the mid-year data retrieve record, the recognition of civil/fiscal depreciation for the competence period: it therefore uses the same logic as the Fixed Assets Depreciation procedure in the Assets module, but only for the days of economic competence of interest in the closure. Once the calculation has been enabled, the ledger template to use must be set, and it must be chosen whether to create a single cumulative record or detailed record for each asset. The flag 'Incremental Oerations', for which it refers to the assets module, allows filtering the type of asset categories to manage. This flag automatically creates what the user can manage separately after processing the closure balances in the dedicated Fixed Assets Depreciation Retrieve procedure.
If both incremental and non-incremental asset categories are present in the company, it is advisable to use the dedicated Fixed Assets Depreciation Retrieve procedure, so that both combinations can be launched in sequence.
Inventory Accounting
The section allows automatically managing, at the end of the mid-year data retrieve record, the recognition of beginning/end inventories for the competence period. Once the management is enabled, we will manage the date range to be used, the type of inventory to consider (Positive/Negative), the type of cost calculation (Average Cost, Latest Cost, FIFO yearly rise, LIFO yearly rise, Management Area, By effective cost batches) and the ledger template to be used for the records to be created. The presence or absence of the Controlling flag will manage the operations in two different ways:
- If the flag is not present, FluentisERP will create the records for the beginning and end inventories on the start and end dates of the Mid-Year Closure period, and will insert them at the end of the other adjustment records of the closure itself.
- If the flag is present, FluentisERP will create the records for beginning and end inventories for each single month within the competence date range of the Mid-Year Closure, and will insert them as Off-Balance Records in the Area associated with the closure itself (thus they will not be closure records, but records valid only for Controlling).
The processing performs a test for the presence or absence of this type of records, and therefore, if they are already present, it will ask if you want to delete and recreate them or if you want to add them (as in the case where only some warehouses are selected and not all through the available dropdown). If both the Controlling Area records and the closure adjustment records should be created, it is necessary to launch the procedure first with the Controlling flag active and then with the flag deactivated.
Tab Parameters
The ‘Parameters’ tab allows setting, for certain account types or for individual account/detail account, the type of balance to calculate. In detail:
General: it is the normal default situation. With this option, the ERP will calculate a debit or credit balance and a general balance.
Debit/Credit: with this option, the program will calculate both a total of debit movements, a total credit, and the related final balance.
The reference is to the various options of the reclassification models present in the Reporting > Reclassifications module: in these, it is possible to set only the value ‘Debit' or ‘Credit' or general.
For example, recording a cost in a reclassification (i.e., the total debit movements of detail account X) and its adjustments (i.e., the total credit movements of detail account X) in two separate points of the reclassification may provide additional information beyond the simple algebraic balance ‘debit’ - ‘credit’ general.