Year-End Steps

Month end closing Activities

1) All the expenses including amortization, prepaid expenses, Preliminary expenses and accruals have been booked.

2) Complete Bank Reconciliation

3) Make sure that Sum of Inter company balances is Zero

4) Suspense Accounts should be cleared regularly.

5) Ensure that all documents related to MM & SD have been entered in system.

6) Ensure that all billing documents are released to accounting.

7) Calculate Overheads on all process Orders (CO43)

8) Technically complete all process orders which are fully processed (CORM).

9) Calculate Variance (KKS1)à (Relevant only if Standard cost is calculated).

10) Settle all process orders which are technically complete (CO88).

11) Close All settled Process Orders

12) Close MM period (Transaction Code: MMPV).

13) Carry out GR/IR clearing (F.13) transaction

14) Depreciation Run (AFAB) has been carried out for the month

15) Close FI Posting period after the month end closing activity is over.

Year end closing Activities

1) Calculate production work in progress on process orders which are not technically complete.

2) Carry out Assessment cycle for Cost Centers.

3) All month end closing Activities should be carried out.

4) Carry Forward Balances to next year

(With TC: F.16 we can carry forward the balance to next year.

With TC: OBH2 copy the number ranges to next year Open next year periods by selecting the Posting Period Variant. then test by posting the transaction in F-02)

Year-End-Closing in Asset Accounting The process described in this blog assists you in keeping on top of Critical Factors, such as data consistency, which can involve a considerable amount of time and work during the year-end closing phase in asset accounting. This blog takes  you through all of the steps necessary for an unproblematic year-end closing, before the critical external audit phase.   

Part 1: Preparation for Year-End Closing in Asset Accounting The year-end closing in Asset Accounting is a required step before you can close the fiscal year in Financial Accounting (FI). If you omit this step, or do not carry it out until after closing the fiscal year in FI, serious problems can result. Among these could be problems with reconciliation (usually differences between values in asset accounting and in the general ledger that result from depreciation recalculation), or difficulties in changing master data. In order to prevent these problems before they can happen, you should follow the steps below in the sequence they are listed.   

1. Check Last Closed Fiscal Year in FI and FI-AA   Critical FactorThe closed fiscal year in FI cannot be larger than the last closed fiscal year in Asset Accounting. If you do not adhere to this guideline, the following problems can result: Recalculation of depreciation is no longer possible, but is nonetheless required, and error messages are therefore issued. Recalculation of depreciation is also triggered, for example, when changes are made to the asset master record (for example, to the cost center or even to texts). These changes are then sometimes no longer possible, since in certain cases the depreciation recalculation is triggered. Reconciliation differences occur due to being unable to run the depreciation recalculation.  Recommendation and Troubleshooting First close the fiscal year in Asset Accounting and then in FI. Make sure that, at the most, two years are open for posting in FI-AA. If you have problems because the fiscal year is closed in FI but not in FI-AA , and in addition the years are far in the past, contact your SAP consultant. In this case you may need to perform a thorough reconciliation of the ledgers. If, as part of the euro conversion, you need to close a company code that is not used for Asset Accounting, then contact SAP consulting using a message.   BackgroundFor more detailed information, refer to the R/3 Library for Asset Accounting or the online documentation for Asset Accounting. Additional information is also found in the Euro Support Guide.      

2. Check Customizing Using Report RACHECK0   Critical FactorErrors in Customizing of depreciation areas, transaction types and period rules. These can cause the following problems:  

Inexplicable error messages are issued when adjustment postings are made, although nothing was changed in Customizing. A typical example of these error messages is AAPO 176 “Transaction type XY cannot be used for activity Z.”  

Transfer postings cannot be carried out.  

Differences occur due to missing account assignments.  

When depreciation is recalculated, there are inexplicable error messages, such as AA641.  

 Recommendation and TroubleshootingCustomizing report RACHECK0 should be started at least once before the go-live date by asset accounting specialists, and corrections made in Customizing accordingly. Modification of transaction types to agree with the current Support Package status, as necessary.  

 BackgroundThe implementation of Support Packages does not change customer-specific settings, although this may be necessary in a few, well-documented cases. You have to make these settings manually. In addition, old Customizing settings (for example, investment support measures) are not reset or only partially reset, and their completeness is checked by the year-end closing program.   

3. Check Incomplete Assets   Critical FactorIncomplete assets prevent the year-end closing from being made. The system lists these assets in an error log, with the request for them to be processed.  Recommendation and Troubleshooting You can find and process incomplete assets before the year-end closing using report RAUNVA00. There are two different types of incomplete assets:

The asset is incomplete, but can be posted.

The asset is incomplete and cannot be posted.  

You need to correct both types.   BackgroundIncomplete assets can be created, for example, when the user lacks authorization for master data fields that are required entry fields, but these are not so critical that the asset cannot be created at all. The system sets an indicator showing that assets are incomplete. Another reason could be that the screen layout rule of the asset is changed, and a field that has no entry is now designated as a required entry field. When changes are made to assets so that they are no longer incomplete, the system does not automatically reset this indicator. However, the indicator can be removed by the report. For assets that are still incomplete when the report is run, you can go directly from the report to their asset master records and correct them, as long as this is allowed by your authorization profile. 

4. Check Indexes   Critical FactorMissing indexes can lead to the following errors:  

Insurable values are not updated. Later calculations in closed fiscal years can only be made using a report.  

If entries are missing, it may not be possible to carry out the fiscal year change.  

If entries are missing, it may not be possible to carry out the recalculation of depreciation, and the assets affected are flagged.  

Inexplicable error messages might be issued when there are certain combinations of settings. One of these might be AA609 “Depreciation area XY not created in comp.code”, although this area does not exist.

 Recommendation and TroubleshootingYou should enter the indexes for determining replacement values, or for updating the base insurable value, as part of the preparations for closing. You use transaction AYLS for this task. It is important to carry out a recalculation of depreciation after the index series have been maintained. Also refer to SAP Note 35721. For assistance with indexing and carrying forward insurable values in fiscal years that are already closed, contact your consultant.   BackgroundCalculation and carryforward of indexed values, above all insurable values, takes place solely during the fiscal year change. If the indexes are not up-to-date at that point, the fiscal year can still be closed. But calculations from that point on can only be made using a special report.   

5. Recalculate Depreciation   Critical Factor

Not recalculating depreciation can lead to the following errors:  

Values are not calculated correctly. This results in an incorrect display in the asset value display transaction.

Differences between the general ledger and subsidiary ledger are possible.

In the new fiscal year, there are assets with the message “Depreciation values not completely calculated for this asset“ (error message AA510). Recalculation at this point often does not correct the error.

Assets with indexed depreciation areas are possibly not deactivated in the case of a complete retirement, if the calculation of replacement values was not up-to-date.

 Recommendation and Troubleshooting Start the depreciation recalculation program for the whole company code, for which the year-end closing is to be carried out. Execute report RAAFAR00 in test mode with the List assets and Execute in Background options. When you run RAAFAR00, a statistical log is issued. The log contains any error messages. Correct the errors leading to any error messages you receive, and start an update run of report RAAFAR00 for these assets.   Background Under certain circumstances, such as those listed below, depreciation values are not updated in the depreciation areas of some assets:  

You have changed depreciation keys. This is especially important in the case of unit-of-production depreciation, where it is essential that you recalculate depreciation after maintaining the current parameters.  

You have made mass changes that you programmed yourself, and these changes affected data relevant to depreciation.  

You still want to calculate subsequent revaluation (after the legacy data transfer is closed) using current index figures. In order to correctly calculate replacement values, however, you can only use index series that calculate historically.

  IMPORTANT: Up to and including this step, you can repeat all activities as often as necessary to ensure that the system is up-to-date. However, in the case of the following steps, you have to consider more carefully the individual planning and regulations within your enterprise, for example, whether you post depreciation once a year or once a month, and so on. 

6. Execute Depreciation Posting Run    Starting with this step, you begin preparing directly for the year-end closing. You can only carry out the processes and activities described below when the year-end closing is imminent and is about to really be carried out. Nonetheless, we recommend carrying out the depreciation posting run RAPOST2000 in test mode beforehand, to catch possible errors.   Critical FactorIt is not possible to carry out the year-end closing without first performing the depreciation posting run for the last period of the fiscal year. Recommendation and TroubleshootingPerform the depreciation posting run for the last period of the year (usually period 12 of the fiscal year being closed). We emphatically recommend that you start report RAPOST2000 first in the Background and in test mode, and then carefully consider the log. If error messages are issued in the test run, then correct the errors (usually these are in account determination or Customizing of cost centers), before starting RAPOST2000 in update mode, since the report cannot be reversed. If RAPOST2000 was nonetheless started by accident and possibly even processed, you should contact Remote Consulting. The following applies if you recently upgraded from a release below 4.7 to a release greater than or equal to 4.7  you should inform yourself about the changed posting logic in the area of cost center postings. Refer to the Release Notes and related SAP Notes, such as 684659 .  Background

RAPOST2000 collects the values to be posted in Asset Accounting, summarizes them according to certain criteria, and then posts these values to the general ledger. This guarantees consistency between the subsidiary ledger and the general ledger. It is important to stress that there is no reversal function for the depreciation postings, and the same applies to periodic asset value postings that we will discuss shortly. If depreciation terms are changed retroactively, this can often be corrected by starting RAPOST2000 as a repeat run.   

7. Execute Periodic Posting Program Critical FactorUnless the periodic posting of balance sheet values is current, it is not possible to carry out the year-end closing. Recommendation and TroubleshootingBefore you can carry out the year-end closing, you have to perform period posting of balance sheet values using report RAPERB2000. Once the report is run, do not carry out any more postings affecting asset balance sheet values.   BackgroundThe need for the periodic posting program is based both on accounting necessities as well as a technical restriction in releases previous to 5.0 and before the implementation of the New G/L (as of release 5.0 the New G/L functionality allows “direct posting” for more than one area). From an accounting perspective, it is necessary in order to be able to make available the current status of all depreciation areas on a given key date. It is important to keep in mind here that the year-end closing report checks the date of the last periodic posting program run using the system date as a reference. As a result, the year-end closing can only be carried out at a time close to the end of the year. In addition, the periodic balance sheet postings are an important step before the reconciliation of the general ledger and subsidiary ledger for the individual depreciation areas, since this is the only way for them to be in agreement. Therefore RAPER2000 has to be executed at least once in update mode. Also in case the New G/L functionality is used (more than 1 area post directly),  RAPERB2000  can be necessary to “catch-up” and post  missing “online”  postings in areas defined as to post directly due to errors.  

8. Reconcile General Ledger and Subsidiary Ledger   Critical FactorThe values in Asset Accounting do not agree with the balances of the general ledger accounts. As possible consequences, the external auditor might not be able to certify the closing, or it may not be possible for the closing to be submitted to tax authorities.   Recommendation and Troubleshooting Perform a reconciliation of the values of Asset Accounting with the balances of the general ledger accounts. We recommend the following procedure:  1. Start report RAABST02. If the report logs differences in table EWUFI_BAL (table FAGLFLEXD if the New G/L functionality is active) , proceed with the following steps. If the report does not find any differences, the general ledger and subsidiary ledger are consistent to each other.    2. For the account concerned, compare the last two fiscal years using the account display transaction (FS10N or FAGLB03 in New G/L) in the General Ledger. If the closing balance and opening balance differ, you have to start the balance carryforward program again for the current year.  3. Create two asset history sheets for the accounts involved using the following parameters:

Limiting the account assignment or the asset class in the dynamic  selections  

Sort version 0020  

Group totals  

Report date – fiscal year end of prior year and current year

Setting “Depreciation posted”  If the starting and final value of the asset   history  sheets are different, you should repeat the fiscal year change in asset accounting ( transaction AJRW).

If the starting and final values are still different after you repeat the fiscal year change, then check to see if there is an asset with a capitalization date but without acquisition data. Follow the procedure outlined in SAP Note 194635. 

 4. The asset history sheet for the previous year does not agree within itself when you cross-foot. In this case:      a) Start RAABST01 for accounts with line item management.    b) Start RAABST02 for reports without line item management.    c) If the balance carryforward is affected, you now have to reset the year-end closing, perform depreciation recalculation, possibly carry out a depreciation posting run, and then run the year-end closing again.  5. The starting balance values of the current year do not agree with the value of the balance display. There are various possible causes, that then also require different actions on your part.     a) The difference arose already during the legacy data transfer. In this case, contact SAP Remote Consulting.     b) Missing line items. To see which line items are involved, see the log of RAABST01 or RAABST02. There are two possible scenarios:  

Missing line items during asset acquisition. These can be created easily using report RACORR05. In the case of multiple account assignments, use report RACORR05A.  

Missing line items during asset retirement. These can not be created using report RACORR05. In this case, contact SAP R/3 Support, describing the exact parameters of the asset concerned.  

     c) Line items with incorrect acquisition year. This situation is found at times with postings from invoice verification (transactions MRHR or MIGO). For correcting this problem, there are a number of correction reports that are listed in SAP Note 366848. If you are unsure of how to proceed, contact SAP Support.      d) Account determinations that have errors or are incomplete can also cause differences, which cause errors during the euro conversion, if not before. For these errors, you should now, at the latest, consider your results from point 2.      e) Manual postings to asset balance sheet accounts. In this case, contact SAP Remote Consulting, with the document numbers involved.  BackgroundFor further Background information and hints on the reports that can be used for reconciliation, refer to SAP Note 382548. The procedure for reconciling the subsidiary ledger and general ledger is described in SAP Note 104567, point 3. Information specific to the local currency changeover in the euro conversion is not relevant for routine preparations for closing. Keep in mind, that certain items in the asset history sheet, such as down payments and APC, can be added together, although they can be assigned to different accounts.   

9.Execute Fiscal Year Change Program Executing the fiscal year change program is an optional step in the course of the year-end closing. It is not necessary in order to carry out the year-end closing. Critical FactorPosting in a given fiscal year is only possible in Asset Accounting when totals segments have been created for the year. These are created by report RAJAWE00, which serves a technical purpose only and has no business or accounting purpose. Recommendation and TroubleshootingWe recommend carrying out the fiscal year change in Asset Accounting close to the time of the year-end closing. From the viewpoint of SAP, no more than two fiscal years should be open at the same time. This means that the current fiscal year and the totals segments belonging to it have to be exactly one year greater than the last closed fiscal year.   BackgroundThe fiscal year change report RAJAWE00 creates totals segments in Asset Accounting with values such as accumulated ordinary depreciation, accumulated special depreciation, planned depreciation of the current year, and so on. Only after these are created can postings affecting asset balance sheet values be made.      

Part 2: Execute Year-End Closing Program  

Once these preparatory tasks have been completed, you can then carry out the year-end closing in Asset Accounting.

 Critical FactorClosing the general ledger before closing  asset accounting violates generally accepted accounting principles. Not only that, but a missing year-end closing in asset accounting, when the fiscal year is already closed in FI, leads among other problems to no longer being able to change asset master records.   Recommendation and Troubleshooting Perform year-end closing in Asset Accounting. First execute report RAJABS00 in test mode, and check the log for error messages. If you carried out the steps listed above in the correct order, you should not see any error messages.  BackgroundAs part of a sequence of postings and master record changes, a depreciation recalculation is triggered and checks are performed into the last fiscal year that is still open in Asset Accounting. If the system then determines that it is no longer possible to post depreciation to the general ledger, all further processing terminates and the system issues an error message.     PS: This blog has been posted thanks to the information and documentation provided  by Markus Bredel  (SAP- IMS). 

1 - Maintain Activity prices - KP26

2 - Release of Standard Cost Estimate - CK40N

3 - MM period close and open - MMPV - Prevent Inventory Back Posting to Previous period - Re-open Period closing

4 - FI period open - OB52 - Opening and closing the period for posting

5 - Parked documents to be posted - FBV0, MIRO

6 - Reposting of Inter Office CC - KB61

7 - Bank Reconciliation

8 - Update Section Code where missing - J1INPP

9 - Maintain GRIR clearing - F.13

10 - Provision for current month - FB50

11 - Depreciation entry - FB50

12 - Exchange rate - To be Updated

13 - Revaluation of foreign currency open items - F.05

14 - Recognition of Inventory at Bonded warehouse - FB50

15 - Maintain Statistical Key Figures - KB31N / KP46

16 - Variance Calculation of Process Orders - KKS1

17 - Settlement of variances - CO88 - Production Order Individual Settlement - KO88 - Settlement Of Production Orders in SAP CO

18 - Assessment cycles - Aux/WH CC to Main CC - KSU5

19 - Assessment cycles - Functional CC to SBU CC - KSU5

20 - Assessment cycles - SBU CC to COPA - KEU5

21 - Profit Center Reposting - 9KE0

22 - Balance Sheet Adjustment calculation - F.5D

23 - Transfer Profit Center to AR & AP - 1KEK

24 - Transfer Inventory to PCA - 1KEH

25 - Assessment Cycle - Dummy PC to SBU PC - 3KE5

26 - Check for "Delivery made, not Invoiced"  - VF03

27 - Match GL and PCA - KE5T

28 - Match PCA and PA

29 - Top Down Distribution in COPA - KE28

30 - Reclassification of GL balances

31 - Balance Carry forward (Year End Only) - F.16

32 - PCA Balance Carry forward  (Year End Only) - 2KES

33 - Transfer to FI - 1KE8

here is the list for FI/CO year end closing check list:now i am sending one document with T.codes CLOSING ACTIVITIES 1 Execute Report for Inter Company Activity & Journal Entries2 Open posting period for next yr (T.Code: OB52)3 Run Business Area's Assignment report. (T.Code: F.50)4 Review list of recurring journal entries (T.Code: FBD3)5 Execute Recurring Entries for A/R, A/P, G/L (T. Code: F.14)6 Process Parked A/R, A/P, G/L accounting documents (T.Code: FBV0)7 Final Cutoff for the Maintenance of Fixed Asset- Add Transfer and Retire (T.Code: ABUMN)8 Run Depreciation in Test Run and post (T.Code: AFAB)9 Verify Display Log for Depreciation Test Run (T.Code: AFBP)10 Capitalize AUC Assets if needed (T.Code: AIAB, AIBU)11 Enter Payroll Data to SAP (T.Code: CAT2)12 Verify Depreciation Balances with GL balances (T.Code: ABST2)13 Post Depreciation (T.Code: AFAB)14 Execute Asset History Report, and retire assets if needed (T.Code: S_ALR_87011963, ABAVN)15 Adjust specific depreciation areas if necessary (T.Code: ABCO)16 Reconcile AM sub ledger with GL (T.Code: ABST2)17 Check Bank Data (T.Code: S_P99_41000212)18 Review AR Open Items (T.Code: FBL5N)19 Review AP Open Items (FBL1N)20 Execute Pending Invoices(T.Code: MRBP)21 Clear Open Item for GRIR, freight (T.Code: F.13)22 Reconciliation of Financial Documents and transactional figures (F.03)23 Open new CO Posting Period: (T.Code: OKP1)24 Compare current (cost estimates) with last current price (Moving Avg) (T.Code: OKBH)25 Update current cost price to material master price field (T.Code: CK11N, CK24)26 Process Freight charges, Match SD freight to actual (T.Code: V-31)27 Review Internal Order Postings(T.Code: OKSA)28 Settle All Orders (T.Code: KO88)29 Verify All Post Goods Issue have been Invoiced (Billing Due List) (T.Code: VF04)30 Review SD Billing Doc from prior month that have not yet been released to accounting (T.Code: F.2D)31 Reconciliation of MM movements in Transit Intra-SAP to Non SAP32 Reconcile PI Inventory with SAP (T.Code: MI07)33 Perform Manual Adjustment if needed (T.Code: F-02, FB50)34 Verify balance of the GR/IR account (T.Code: MB5S)35 Post Accruals and Deferrals (T.Code: FBS1)36 Clearing of Cancelled Documents (T.Code: F-03, F-32, F-44)37 Check Profitability Segment Adjustment (T.Code: KISR)38 Aging Report-Reconcile GL balances with sub ledger balances AP (T.code: FBL1N, FBL5N, FBL3N)39 Check the check run numbers (T.Code: FCH1, FCHI)40 Bank reconciliation Data (T.Code: FF67 & FEBA)41 Enter Tax Journal Entry (T.Code: FB41)42 Reconcile GL balances with sub ledger balances AR/MM/AP (T.Code: F.03)43 Display Balance Sheet Adjustments (T.Code: F.5F)44 Post Balance Sheet Adjustments (T.Code: F.5E)45 Post Foreign Currency Valuation (foreign exchange) (T.Code: F.05)46 Check generic cost centers for posting with wrong accounts47 Correct wrong postings on generic cost centers48 Check Validation dates for Cost Centers, Cost Elements, CO area (T.Code: GGB0)49 Check COGI--for both month end and year end50 Doubtful receivables (T.Code: F104)

51 Verify In-transit Inventory52 Reconcile PA to G/L (T.Code: KE5U)53 Post Cost Center Assessments and Distributions (T.Code: KSU5 & KSV5)54 Run CO-FI Reconciliation to balance (T.Code: KALC)55 Run BW reports P&L and Balance Sheet56 Maintain CO yr variant (T.Code: KCRQ)57 Fiscal Yr Balance carry forward AP/AR/AM (T.Code: F.07,58 Fiscal Yr Balance carry forward CO (T.Code: CXS1)59 Fiscal Yr balance carry forward FI (T.Code: F.16)60 Fiscal Yr balance carry forward PCA (T.Code: 2KES)61 Set Document number ranges - FI - new year (T.Code: OBH2, OBA7)62 Set Document number ranges AP/AR - new year (OBA7)63 Generate Financial statement Reports (T.Code:OB58) OR (T.Code: FSE2)64 Change Fiscal Year For Assets (T.Code: AJRW)65 Year end Closing-- Asset Accounting--final for year end (T.Code: AJAB)66 Close CO Posting Period : (T.Code: OKP1)67 Close Prior A/R Posting Period (T.Code: OB52)68 Close Prior A/P Posting Period (T.Code: OB52)69 Close Prior MM Posting Period (T.Code: OMSY)70 Reverse accruals and deferrals for the new month (T.Code: F.81)71 Reconciliation of Financial Documents from old fiscal year and new fiscal year (T.Code: FNSL)72 Load Balances, Budget Data for Cost centers, sales73 Update Retained Earning Account , balance carry fwd (T.Code: F.16) Month end closing Activities 1. All the expenses including amortization, prepaid expenses, Preliminary expenses and accruals have been booked. 2. Complete Bank Reconciliation (T.Code: FF67) 3. Make sure that Sum of Inter company balances is Zero 4. Suspense Accounts should be cleared regularly. 5. Ensure that all documents related to MM & SD have been entered in system. (T.Code:F-22 & F-43) 6. Ensure that all billing documents are released to accounting. 7. Calculate Overheads on all process Orders (CO43) 8. Technically complete all process orders which are fully processed (CORM). 9. Calculate Variance (KKS1)à (Relevant only if Standard cost is calculated). 10. Settle all process orders which are technically complete (CO88). 11. Close All settled Process Orders 12. Close MM period (Transaction Code: MMPV). 13. Carry out GR/IR clearing (F.13) transaction 14. Depreciation Run (AFAB) has been carried out for the month 15. Close FI Posting period after the month end closing activity is over (T.Code:OB52)   Year end closing Activities: 

1. Calculate production work in progress on process orders which are not technically complete. (CO88). 2. Carry out Assessment cycle for Cost Centers.(T.Code: KSUB) 3. All month end closing Activities should be carried out. 4. Carry Forward Balances to next year (With TC: F.16 we can carry forward the balance to next year. With TC: OBH2 copy the number ranges to next yearOpen next year periods by selecting the Posting Period Variant.then test by posting the transaction in F-02) 

here is the list for FI/CO year end closing check list:now i am sending one document with T.codes CLOSING ACTIVITIES 1 Execute Report for Inter Company Activity & Journal Entries2 Open posting period for next yr (T.Code: OB52)3 Run Business Area's Assignment report. (T.Code: F.50)4 Review list of recurring journal entries (T.Code: FBD3)5 Execute Recurring Entries for A/R, A/P, G/L (T. Code: F.14)6 Process Parked A/R, A/P, G/L accounting documents (T.Code: FBV0)7 Final Cutoff for the Maintenance of Fixed Asset- Add Transfer and Retire (T.Code: ABUMN)8 Run Depreciation in Test Run and post (T.Code: AFAB)9 Verify Display Log for Depreciation Test Run (T.Code: AFBP)10 Capitalize AUC Assets if needed (T.Code: AIAB, AIBU)11 Enter Payroll Data to SAP (T.Code: CAT2)12 Verify Depreciation Balances with GL balances (T.Code: ABST2)13 Post Depreciation (T.Code: AFAB)14 Execute Asset History Report, and retire assets if needed (T.Code: S_ALR_87011963, ABAVN)15 Adjust specific depreciation areas if necessary (T.Code: ABCO)16 Reconcile AM sub ledger with GL (T.Code: ABST2)17 Check Bank Data (T.Code: S_P99_41000212)18 Review AR Open Items (T.Code: FBL5N)19 Review AP Open Items (FBL1N)20 Execute Pending Invoices(T.Code: MRBP)21 Clear Open Item for GRIR, freight (T.Code: F.13)22 Reconciliation of Financial Documents and transactional figures (F.03)23 Open new CO Posting Period: (T.Code: OKP1)24 Compare current (cost estimates) with last current price (Moving Avg) (T.Code: OKBH)25 Update current cost price to material master price field (T.Code: CK11N, CK24)26 Process Freight charges, Match SD freight to actual (T.Code: V-31)27 Review Internal Order Postings(T.Code: OKSA)28 Settle All Orders (T.Code: KO88)29 Verify All Post Goods Issue have been Invoiced (Billing Due List) (T.Code: VF04)30 Review SD Billing Doc from prior month that have not yet been released to accounting (T.Code: F.2D)31 Reconciliation of MM movements in Transit Intra-SAP to Non SAP32 Reconcile PI Inventory with SAP (T.Code: MI07)33 Perform Manual Adjustment if needed (T.Code: F-02, FB50)34 Verify balance of the GR/IR account (T.Code: MB5S)35 Post Accruals and Deferrals (T.Code: FBS1)36 Clearing of Cancelled Documents (T.Code: F-03, F-32, F-44)37 Check Profitability Segment Adjustment (T.Code: KISR)38 Aging Report-Reconcile GL balances with sub ledger balances AP (T.code: FBL1N, FBL5N, FBL3N)

39 Check the check run numbers (T.Code: FCH1, FCHI)40 Bank reconciliation Data (T.Code: FF67 & FEBA)41 Enter Tax Journal Entry (T.Code: FB41)42 Reconcile GL balances with sub ledger balances AR/MM/AP (T.Code: F.03)43 Display Balance Sheet Adjustments (T.Code: F.5F)44 Post Balance Sheet Adjustments (T.Code: F.5E)45 Post Foreign Currency Valuation (foreign exchange) (T.Code: F.05)46 Check generic cost centers for posting with wrong accounts47 Correct wrong postings on generic cost centers48 Check Validation dates for Cost Centers, Cost Elements, CO area (T.Code: GGB0)49 Check COGI--for both month end and year end50 Doubtful receivables (T.Code: F104)51 Verify In-transit Inventory52 Reconcile PA to G/L (T.Code: KE5U)53 Post Cost Center Assessments and Distributions (T.Code: KSU5 & KSV5)54 Run CO-FI Reconciliation to balance (T.Code: KALC)55 Run BW reports P&L and Balance Sheet56 Maintain CO yr variant (T.Code: KCRQ)57 Fiscal Yr Balance carry forward AP/AR/AM (T.Code: F.07,58 Fiscal Yr Balance carry forward CO (T.Code: CXS1)59 Fiscal Yr balance carry forward FI (T.Code: F.16)60 Fiscal Yr balance carry forward PCA (T.Code: 2KES)61 Set Document number ranges - FI - new year (T.Code: OBH2, OBA7)62 Set Document number ranges AP/AR - new year (OBA7)63 Generate Financial statement Reports (T.Code:OB58) OR (T.Code: FSE2)64 Change Fiscal Year For Assets (T.Code: AJRW)65 Year end Closing-- Asset Accounting--final for year end (T.Code: AJAB)66 Close CO Posting Period : (T.Code: OKP1)67 Close Prior A/R Posting Period (T.Code: OB52)68 Close Prior A/P Posting Period (T.Code: OB52)69 Close Prior MM Posting Period (T.Code: OMSY)70 Reverse accruals and deferrals for the new month (T.Code: F.81)71 Reconciliation of Financial Documents from old fiscal year and new fiscal year (T.Code: FNSL)72 Load Balances, Budget Data for Cost centers, sales73 Update Retained Earning Account , balance carry fwd (T.Code: F.16) Month end closing Activities 1. All the expenses including amortization, prepaid expenses, Preliminary expenses and accruals have been booked. 2. Complete Bank Reconciliation (T.Code: FF67) 3. Make sure that Sum of Inter company balances is Zero 4. Suspense Accounts should be cleared regularly. 5. Ensure that all documents related to MM & SD have been entered in system. (T.Code:F-22 & F-43) 6. Ensure that all billing documents are released to accounting. 7. Calculate Overheads on all process Orders (CO43) 8. Technically complete all process orders which are fully processed (CORM). 9. Calculate Variance (KKS1)à (Relevant only if Standard cost is calculated). 10. Settle all process orders which are technically complete (CO88). 11. Close All settled Process Orders 

12. Close MM period (Transaction Code: MMPV). 13. Carry out GR/IR clearing (F.13) transaction 14. Depreciation Run (AFAB) has been carried out for the month 15. Close FI Posting period after the month end closing activity is over (T.Code:OB52)   Year end closing Activities: 1. Calculate production work in progress on process orders which are not technically complete. (CO88). 2. Carry out Assessment cycle for Cost Centers.(T.Code: KSUB) 3. All month end closing Activities should be carried out. 4. Carry Forward Balances to next year (With TC: F.16 we can carry forward the balance to next year. With TC: OBH2 copy the number ranges to next yearOpen next year periods by selecting the Posting Period Variant.then test by posting the transaction in F-02) 

Period End Closing Activities

March 16, 2013

CLOSING THE BOOKS IN FINANCIAL ACCOUNTING:

Closing operations recur periodically and can be subdivided as follows

Period-End Closing (Month End & Quarter End)

Year-End Closing

The closing operations component supports the preparation and carrying out of activities required for closing. For this purpose, the system provides various standard reports that you can use to generate evaluations and analyses directly from the posted account balance. All the three levels of closing operations are summarized below

Period-End Closing (Monthly & Quarterly Closing)

Following activities as part of month-end closing

Open and close posting periods: GAVL can close one or more posting periods in the past for posting, and permit posting to be made to one or more current or future posting periods.

Use different reports like:

o Compact journal

o Balance audit trail

o Accounts reconciliation

o Account balances

o Open item list

In SAP period can be opened and closed at Company Code level,

Year-End Closing (Quarterly & Final Closing)

At the beginning of the new fiscal year, the user is required to open the posting periods in the new fiscal year and carry forward the balances from the previous year. You do not have to close the old fiscal year and make the closing postings before opening the new fiscal year.

Before the General Ledger begins the month-end closing activities, the sub-ledgers must have completed their closing activities under the respective processes as follows

AP Month-end Closing

AR Month-end Closing

Fixed Assets Month-end Closing

Process of Month-end closing

The General Ledger Month-end Closing is broadly comprises of the following sub-processes:

⇒ Foreign Currency Valuation for Open Items

⇒ Foreign Currency Valuation For Balance-managed Accounts

⇒GR/IR Regrouping

⇒Open Items Clearing

⇒Post/reverse accruals

⇒ Maintain Exchange Rate Table

⇒ Post Bad Debts

⇒Settlement of I/O to AUC

⇒Settlement of AUC to Fixed Assets

⇒Depreciation Run

⇒ Regrouping of Account balance

⇒Open/Close Posting Periods

⇒Creation of Financial Statements

The Closing or period end activities are generally carried out before generating important reports like Profit & Loss Account, Balance Sheet etc….

for e.g.: unless provisional entries are posted at the period end the Financial statements would not depict the true picture.

⇒Foreign Currency Valuation for Open Items:

In case of International Carrier Revenue/Expenses, all the open items should be analyses at period end and invariably at the Fiscal Year end for any revaluation on account of Foreign Exchange rate fluctuations.

In this procedure, we valuate items in foreign currency at the end of a period in order to post expenses or revenues from currency fluctuations. If the program for all open items in foreign currency is run, then all items posted to accounts that are open item managed would be valuated.

The individual valuation principle determines the way valuation is carried out: only individual items that are still open on the key date are considered for valuation.

The system will post any Gain / Loss on account of Foreign exchange rate fluctuation in a specified G/L P&L Account. For expense from currency valuation, the posting is:

Debit: Gain / Loss on A/c of Currency Valuation (in case of Loss)

Credit: Foreign Customer / Vendor Account

⇒Foreign Currency Valuation for Balance-managed Accounts:

Foreign Currency transactions with Foreign Vendors and Customers that are open as on Closing Date can be revalued for any foreign exchange fluctuations that have taken place after the transaction has been posted. Exchange rate differences resulting from the valuation of open items and foreign currency balance sheet accounts are automatically posted to specific accounts that will be configured in the system.

When valuating open items, the system posts to a balance sheet adjustment account and an account for currency exchange differences resulting from the valuation. This could be either a gain or a loss account.

For the valuation of foreign currency balances and, to post the exchange rate differences arising on such valuation, a revenue and expense account would be defined.

⇒GR/IR Regrouping:

The GR/IR clearing account is an intermediate account between the warehouse stock sheet account and the vendor account. At Goods Receipt stage, the net invoice amount expected is posted from the stock account to the GR/IR clearing account. This posting is then cleared by an offsetting entry on the vendor account at Invoice Verification stage.

The accounting entry being passed is as follows:

At the Goods Receipt stage:

Stock A/c Dr

GR/IR A/c Cr

At Invoice Verification Stage:

GR/IR A/c Dr

Vendor A/c Cr

In case of GR/IR, SR/IR account a standard transaction is required to be run which automatically clears the open items.

⇒Open Items Clearing:

In vendor accounts credit line item say invoices are to be set off against debit entry (payment entry). Similarly in customer accounts debit line item say invoices are to be set off against credit entry (payment entry). This process is known as clearing and it helps in analyzing the open items of a customer.

The clearing function is required for all accounts of vendors and customers so that transactions can be tracked by their status as “open” or “cleared”. This enables amongst other things analysis of outstanding from or to parties and linking payments /credit debit memos form or to parties with the relevant invoicing and billing transactions.

For other GL accounts like bank receipt clearing and bank payments clearing accounts which would receive offsetting entries at the time the bank statement is being uploaded. In case of GR/IR, SR/IR account a standard transaction is required to be run which automatically clears the open items.

The basic prerequisite for clearing is that the accounts must be kept on an open item basis. Customer and Vendor accounts are by default open item managed. This allows monitoring of outstanding receivables and payables at any time. The open item management option, however, must be defined for general ledger accounts.

Generally the inward or outward payments to vendor or customer are made with clearing but still there may be some situations where the items at vendor/customer may remain open e.g. due to advance payments or on account payments or debit/credit notes etc. If the payments are made without clearing the open items in debit and credit of the vendor may disturb the aging reports. The open debit and credit items are to be adjusted through auto clearing or manual clearing for each invoice.

Open Account can be cleared manually & automatically based on certain predefined criteria e.g. assignment or reference number etc. The basis of clearance will be specifically decided during realization phase of the project

⇒Post/reverse accruals: (FBS1)

The Manual Accruals component enables you to calculate and post values in General Ledger Accounting and through a Transaction these can be reversed on the desired date.

⇒Maintain Exchange Rate Table:

SAP supports all kind of Foreign Currency postings to General Ledger and Sub Ledgers, these foreign currency amounts are converted into local currency based on exchange rates maintained in the Exchange rate table.

Exchange rates are predominantly used for the following:

Translate foreign currency amounts when posting or clearing or to check exchange rate entered manually.

Determine the Gain or Loss from exchange rate difference.

Evaluate open items in foreign currency Balance Sheet Accounts.

The exchange rates are defined by period (“valid from”)

The system uses the type M exchange rates for foreign currency translation when posting and clearing documents. In this activity Central Finance department needs to enter the Exchange Rate. An entry must exist in the system for this exchange rate type. The exchange rates apply to all company codes.

⇒Post Bad Debt:

Adjustment of Accounts receivable is needed because of bad debt. This process contains of four steps:

Reclassify a customer claim from AR to bad debt.

Post an expected loss for the customer in general ledger

When the customer has paid or the loss is actual, then you have to reverse the preliminary loss. ((Debtors outstanding for more than two years are written off in consultation with the management.)

Post the incoming payment, or the actual loss

⇒Settlement of Order to Asset Under Construction (AUC):

Investment orders are generally used to collect and settle the costs of an investment project towards assets within Asset accounting. Investment orders are settled in two steps:

1) Settlement to Asset Under Construction (AUC)

2) Settlement from Asset Under Construction (AUC) to fixed asset.

⇒Settlement to Fixed Asset:

To be able to do settlement to fixed asset the

asset master data must have been created. This should have been done before the period end closing process starts. Also maintaining settlement rule and changing status for the order should have been done before the period end closing starts.

⇒Execute Depreciation Run:

Every asset transaction in the R/3 System FI-AA component immediately causes a change of the foretasted depreciation. However, it does not immediately cause an update of the depreciation and value adjustment accounts for the balance sheet and profit and loss statements. The planned depreciation is posted to the general ledger when you run the periodic depreciation posting run.

⇒Regrouping of Account balance:

A credit balance on a customer account should be displayed as a payable; conversely, a debit balance on a vendor account should be displayed as a receivable. If such a situation arises, the program makes the appropriate adjustment postings automatically.

At the year end, based on the selection made by the user the system will facilitate regrouping of debit balances as per payables to a separate account for re-classification.

The credit balance in customer accounts will be shown separately in the annual financial statements. Customer balances over six months and other balances will be shown separately.

⇒Open and Closed Posting period:

Carry forward g/l balances

This process involves carrying forward account balances into the new fiscal year. The balance to be carried forward is shown in the account balance display.

When you carry forward the balances for G/L accounts at the end of a fiscal year, the system automatically adjusts the balances when you post values to the previous year. The system uses an indicator to determine whether the balances have been carried forward. Once this has been done, the

balance is automatically carried forward whenever a posting is made, even when a posting is made to the previous year. It is therefore not necessary to execute the balance carry forward again.

The balances on the balance sheet accounts are simply carried forward into the new fiscal year.

Profit and loss accounts are carried forward to Retained Earnings accounts. The balances of the profit and loss accounts are set to Zero.

Carry forward asset balances

From the point of view of the system, a fiscal year change is the opening of a new fiscal year for a company code. At the fiscal year change, the asset values from the previous fiscal year are carried forward cumulatively into the new fiscal year. Once the fiscal year change takes place, you can post to assets using value dates in the new fiscal year. At the same time, you can continue to post in the previous fiscal year.

Before you can close a fiscal year in Financial Accounting from a bookkeeping perspective, you have to carry out preparatory measures in Asset Accounting.

The fiscal year change can only be carried out (even in test mode) for the new fiscal year. The earliest that you can carry out a fiscal year change is in the last month of the old fiscal year. You can choose any point in the new fiscal year for carrying out the fiscal year change. Before you can change to fiscal year YYYY, you must have already closed fiscal year YYYY – 2. You can have a maximum of two fiscal years open for posting at one time.

No business transactions can be posted in a new fiscal year before the fiscal year change. You can continue to post in the old fiscal year, even after the fiscal year change. The system automatically corrects any values that are affected by postings in the past.

Carry forward customers & vendor balances

This program calculates the balance carried forward for customers and/or vendors.

The balances of the previous year are carried forward to the New Year.

When posting into a previous year, the system carries forward the balance automatically. This is independent of whether the program has already run or not. “Posting to a previous year” means that the posting date of the document has an earlier year than the entry date. This automatic carrying forward also occurs accumulatively over several years that mean a posting in January 2013 with the posting date December 2011 changes the balance carried forward for 2010 and 2011.

SAP recommends that the program is run at the beginning of the new fiscal year. If the program is already run at the end of the last fiscal year, postings which are posted after this to the last fiscal year, do not result in automatic adjustment of the balance carried forward because it is not a “posting to a previous year”. In such a case, it is necessary to let the program run again after these postings to carry forward the postings entered later.

⇒Creation of Financial Statements:

All the financial statements whether internal or external shall be prepared monthly / quarterly / half yearly and yearly basis or they can be created as & when required without further processing of data.

There shall be one Retained Earnings account defined & configured in SAP to take care of balance of retained earnings as per Indian Companies Act, 1956 and this will be displayed in Balance Sheet under Reserves & Surplus.