How to process period-end closing or year-end closing in Sage 500 ERP

Setting up GL Options
1. Before closing a fiscal year, configure the following options appropriately to achieve the desired results during year-end processing.
2. Go to General Ledger, Maintenance, GL Setup, Set Up GL Options.
3. Verify the information on the following tabs:
  1. Main tab settings:
    Clear Non-Financial Accounts at Year-End. Select this option to clear non-financial account balances for the next fiscal year. This applies only to accounts with a Non-Financial account group. This option has no effect on statistical data. If you do not select this option, all non-financial account balances are carried over to the next fiscal year.
    Default Budget - Select a default budget to use for reporting purposes. If you select Copy Budget as the Year-End Copy option, this budget is also updated during year-end processing.
    Year-End Copy - Select to copy budget figures, or the current year's actual figures, to the budget specified in the Default Budget option. Select (none) if no budget copy at year-end is required.
    Note: Depending on the size of the Chart of Accounts, selecting this option may cause the year-end close to take a great deal longer than a standard period-end process.
    Copy Budget - Select the budget used to update the figures for the budget specified in the Default Budget option during year-end processing. This field is disabled if (none) or Copy Actual is specified for the Year-End Copy option.
  2. Additional tab settings:
    Retained Earnings: Verify the correct Retained Earnings account is specified.
    GL Account History: Select the number of years to keep transaction summary history and account history in the General Ledger. Data older than this is purged at year-end and is summarized by account and date if the purge option is selected when you close the fiscal year in Process Period End. See additional information regarding purging at the end of this document.
    GL Detail Transactions: Select the number of years to keep transactional detail in the General Ledger. Data older than this is summarized by date at year-end and is unavailable for reports. See additional information regarding purging at the end of this document.
    WARNING: Periodic GL history enables you to print financial statements and budgets from historical data. Transaction history allows you to print detailed transaction reports from history. Both account history and transaction history may be purged and therefore render the data unavailable based on the setup of these options. See the 'Default Auto Purge' section for additional information on setting purge option
  3. Financial Terms tab settings:
    Review the terms used and change as needed for financial reporting purposes.
Closing the Year
1. Use the Process Period End task to close the fiscal year. Process Period End verifies there are no unposted batches for the period, and when selected, performs each of the following tasks:
  1. Print period end reports
  2. Purge GL data
  3. Close the fiscal year
  4. Year-end processing is automatically performed when the Current Period specified in Set Up GL Options is set to the last period of the current fiscal year
2. Use the following as a guideline for closing the fiscal year:
  1. Complete posting, adjusting, and closing procedures for all subsidiary modules.
  2. Complete posting of all GL pending batches, recurring transactions, and adjusting entries in Process Journal Transactions using an appropriate posting date.
  3. Print all year-end reports as required by your accountant or bookkeeper.
  4. Verify applicable GL account balances agree to month-end report balances in modules such as AR, AP, and MC.
  5. Make any necessary adjustments to the GL.
  6. Reprint year-end reports, if necessary.
  7. Print final Financial Statements and verify they balance.
  8. Complete year-end processing by selecting General Ledger, Activities, Process Period End.
    1. Close Period XX-YYYY ending on MM/DD/YY is activated only if the period selected in the header is the oldest open period; otherwise, this option is disabled. This option should be selected after all the steps stated above have been completed and account balances are finalized for the year.
      Note: A period cannot be closed in the General Ledger if that period is still open in a subsidiary module. A warning displays the suspense account has a balance or if any unposted GL batches have a posting date prior to the period being closed.
    2. If the period closed is the same as the Current Fiscal Year and Current Period defined in GL Options, the Current Year and Current Period are incremented in GL Options. The Status in GL Setup Fiscal Calendar for the period being closed is set to "Closed."
  9. Adjust budget figures for the new year, as necessary.
  10. Print the new period's financial statements and verify that the Balance Sheet accounts have the appropriate beginning balances, that Retained Earnings is correct, and that the beginning balances for the Income Statement accounts are $0.
  11. Make a backup of all company data and place it in safe permanent storage. This gives you a permanent record of the company's financial position at the end of the year, and can be restored if necessary.
Additional Information
1. Journal Entry adjustments are made in GL through the Process Journal Transactions task. The following are examples of common adjustments made before closing a GL period:
  1. Depreciation/Amortization expense is calculated and booked.
  2. Loss Provisions are made to applicable accounts.
  3. Recurring journal entries are noted.
  4. Allowance is made for Doubtful Accounts.
  5. Inventory is adjusted to physical counts and analyzed for obsolescence.
  6. Income and expenses are accrued as necessary.
  7. Deferred Income is recorded.
  8. Correction of any errors in prior postings.
  9. See your accountant or bookkeeper for further information regarding adjustments.
2. Year-end processing and period-end processing are essentially identical. The most significant difference is that year-end processing can generate the new Budget for the following year.
3. Transactions can be posted only to open periods. Any closed periods can be reopened through Set Up Fiscal Calendar; however, after a period is reopened, that period and all future periods must be re-closed. Any transactions posted to a prior period change the related reports and financial statements. Therefore, the ability to open a closed period should be subject to management approval.
Default Auto Purge
1. Sage 500 is designed to automatically purge data at preset time periods for each individual module. You can change the default purging periods to suit your particular needs.
2. Purging data is not usually necessary; most businesses want to keep records much longer than the default period. Sage Software recommends disabling the feature. If you do not wish to purge data at a specific time, follow the instructions below to DISABLE automatic purging.
  1. Go to Set Up Options in each module and reset the purge fields to 999.

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