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FAQ (US) - Timing of year-end tasks: What should I do when?

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Description

Warning:  This resolution may require you to install a payroll tax update. Update taxes in each company folder that does not share a tax file. After you complete this installation, tax changes are effective the next time you process payroll, regardless of the effective date on the tax table or the dates on the check. Tax updates do not affect previously issued checks.  

Note:  Throughout this article, "old year" refers to 2022, and "new year" refers to 2023.  

Refer to the Where can I find Year-End Procedures Guides (YEPG)? and additional articles linked below for more information about year-end processing and tasks.

Resolution

Q: Do I need to install the year-end version before I print W-2s, 1099s, or 1098s?
A: Yes, you must install the year-end version before you process or print those government forms or reports.


Q: In what order should I close my applications at year-end?
A: All Sage 300 Construction and Real Estate Accounting and Management Product applications are closed independently of one another and can be closed in any order with General Ledger being the last one you should close. Applications are typically closed in the following order:

  1. Payroll - This ensures the first payroll for the new year processes correctly. You can generate W-2s before or after you close the year in Payroll.
  2. Property Management and Accounts Payable - You can generate 1099s and 1098s before or after you close the year in these applications. This also ensures the vendor totals for This Year, Last Year, and Next Year are accurate.
    Tip: In Accounts Payable, you need to close the 1099 year at the end of the calendar year, regardless of when your fiscal year-end occurs.
  3. Equipment Cost, Contracts, and Job Cost - Job Cost and Equipment Cost send entries to General Ledger, and Contracts sends entries to Job Cost. These applications should be closed before you close the year in General Ledger. If the new month is the first month of a new year, the year-to-date totals are replaced by the next year's totals.
  4. Accounts Receivable and Cash Management - These applications send entries to General Ledger and should be closed before you close the year in General Ledger.
  5. General Ledger - Close year in this application last to ensure all entries posted from the interfacing applications are included.


Accounts Payable:

Q: Do I need to install the year-end version before I print government forms for the year-end reporting?
A: You will need to upgrade to the 2022 supported year-end release (version(s) to be determined) before printing 1099s. Be sure to complete any 1099 corrections for 2021 before upgrading to the 2022 supported year-end release.

Q: Can I print 1099s before I close the fiscal year in General Ledger?
A: Yes. You can print 1099s regardless of whether you have closed the fiscal year in General Ledger. See the next Q&A for more information.

Q: Do I need to close my 1099 year before I print 1099s and checks for the new year?
A: The timing of closing your 1099 year depends on your current 1099 year (File, Company Settings, AP Settings). Consider the scenarios below:

Scenario 1: Your 1099 year is 2022.

  • You can print 1099s before or after you close the 1099 year.
  • You can print 2023 checks before or after you close the 1099 year.

Scenario 2: Your 1099 year is 2021.

  • Close the 1099 year before you print 1099s or print 2023 checks.
  • Close the 1099 year again (to make the 1099 year 2023) to keep your settings current.

Scenario 3: Your 1099 year is 2023.

  • You can print 1099s and 2023 checks any time.
  • You do not need to close your 1099 year again until late 2023/early 2024.

Q: Can I enter invoices and print checks for the new year before I close the old year in Accounts Payable?
A: Verify your current year and 1099 year first (File, Company Settings, AP Settings). Invoices and checks accumulate vendor and 1099 totals based on the accounting date of the invoice or check and the current year ending date. Invoices or checks with an accounting date in a future year accumulate in the Next Year box for vendor totals or for 1099 prefix totals. If you enter an invoice or print a check with an accounting date more than one year beyond your current year ending date, that amount accumulates with the Next Year totals causing that total to be incorrect.

For example, if your current Accounts Payable year end or 1099 year end is 12/31/2021, you can enter invoices and print checks with accounting dates up through 12/31/2022. Entering an invoice or check with a 2023 date causes those totals to incorrectly accumulate in the Next Year field along with all of the 2022 entries.

Do not enter invoices or checks with accounting dates more than 12 months beyond your current year end.

Note that you need to close the 1099 year at the end of each calendar year regardless of your fiscal year end date.


General Ledger:

Q: Can I close the fiscal year in General Ledger before I know what all my prior year adjustments are going to be?
A: Yes. You may want to close the fiscal year so that you can print current financial statements in the new year. When you make entries to a period in a prior year, open the appropriate prior period to post those entries in General Ledger. After you post entries to the prior year, close your fiscal year again and close the posting period again (Tasks, Open/Close Posting Period). Refer to
How do I record a prior year adjustment in General Ledger? and How do I close prior year adjustments to retained earnings?.

Q: Do I need to install the year-end version before closing the fiscal year in General Ledger?
A: You do not need to install the year-end version before closing the year. You may close the year before or after installing the year-end update


Payroll:

Q: In what order should I close the year in Payroll, install the tax file update, and install the year-end version?
A: You can close your year, update taxes, and install the year-end version in any order. However, you need to consider the effect that issuing checks and generating W-2s will have relative to the timing of these year-end tasks. For more information, continue reading the Q&As below.

Q: What do I need to do before I process checks for the new year?
A: There are several things you must do before processing checks for the new year.

  • Print and post all checks for the old year.
  • Close the year in Payroll.
  • Download and update taxes.
  • Make changes to employee setup as needed for those employees who have submitted a W-4 Form changes.

Q: What do I need to do before I generate W-2s?
A: There are a couple of things you must do before generating W-2s.

  • Print and post all checks for the old year
  • Install the 2022 supported year-end release

Note that you do not need to close the year or update taxes before generating W-2s.

Q: What are some examples of year-end task workflow?
A: Here is an example of a common year-end Payroll workflow for Sage 300 CRE customers:

  1. Print and post old year checks.
  2. Close the year.
  3. Update taxes.
  4. Enter time, process, and print new year checks.
  5. Install the year-end software update.
  6. Print W-2s.

You can also view a Payroll year-end workflow diagram in the Year-End Procedures Guide. Where can I find Year-End Procedures Guides (YEPG)?

Q: Do I need to close the month before I close the year?
A: No. If your current Payroll month is December, you can only close the year. Closing the year also closes the last month of the year.

Q: When should I update the Payroll tax file for the new year's tax changes?
A: Download and update taxes after you print and post the last payroll of the old year (2022) and close the year, but before you process checks for the first payroll of the new year. Although the Update Taxes command makes tax rates current for the new year, you may still need to change local taxes and rates specific to your company (for example, state unemployment rates).

If you install the tax update before you process the final checks for the old year, the checks will process with the new tax rates. See What can I do if I download and update taxes too soon?.

Q: When do I print year-end Payroll reports?
A: Print all the necessary month, quarter, and year-to-date reports. You can print 4th quarter and W-2 forms before or after closing the year. Prior quarter totals are stored as far back as one quarter only, and prior-year totals are stored as far back as one year only. For example, 4th quarter totals are stored until you close March, which closes 1st quarter, and old year totals are stored until you close the new year.

Q: Can I process payroll for the new year before I print W-2s?
A: Yes, as long as you close the year in Payroll and update taxes. You can then process payroll for the new year and print W-2s based on prior year totals.

See the following Q&As for more information.

Q: Can I enter time for the new year before I close the old year in Payroll?
A: Yes, you can enter time before closing the year. However, you should not process or print payroll checks for the new year before closing the current year and updating taxes.

Q: Can I process, print, or post payroll for the new year before I close the old year in Payroll?
A: No, do not process or print payroll checks for the new year before closing the year, and updating taxes.
If you issue checks for the new year before closing the old year, your check calculations and government reports will be affected. Refer to
What happens if I process payroll for the new year before I close the old year in Payroll? and How do I correct a check I issued for the new year before I closed last year in Payroll?.

Q: Do I need to install the year-end version before I print government forms for the year-end reporting?
A: You will need to upgrade to the
2022 supported year-end release before printing the W-2.

You must download and update your taxes before printing checks for the new year on all versions.

Q: Do I need to install the year-end version before I print my T4s?
A: Yes, in order to guarantee form compliance you must install the year-end version.



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