Mastering Year-End Closing: A Dynamics GP Guide for General Ledger

Table of Contents

This article provides a comprehensive guide outlining the recommended year-end closing procedures for Microsoft Dynamics GP’s General Ledger module. It includes a detailed checklist of the steps required, in-depth information for each step, and a section addressing frequently asked questions to assist users through the process. The procedures detailed here are specifically applicable to Microsoft Dynamics GP.

It is crucial to thoroughly read this article before commencing any steps. Always ensure you have a recent and validated backup of both your company database and the Dynamics database before beginning the year-end closing process. Note that during the year-end closing routine, records designated for movement are temporarily held before being transferred to the GL30000 table. Therefore, you must have sufficient free disk space, approximately equal to the size of your GL20000 table, to successfully complete the routine.

Year-End Closing Checklist¶

Successfully completing the year-end closing procedure for General Ledger in Microsoft Dynamics GP involves a series of distinct steps. Following this checklist ensures all necessary actions are taken in the recommended order.

1. Complete posting and closing procedures for other integrated modules.
2. Post all final adjusting entries within General Ledger.
3. Print an account list to verify the posting type assigned to each account.
4. Optionally, close the final fiscal period of the year.
5. Optionally, perform file maintenance on the Financial series modules.
6. Verify all relevant settings within the General Ledger Setup window.
7. Create a comprehensive backup of your company data.
8. Print a final Detailed Trial Balance report.
9. Print all required year-end financial statements.
10. Set up the fiscal periods for the new year.
11. Execute the fiscal year-end closing routine.
12. Optionally, close all fiscal periods across all series.
13. Adjust budget figures for the new year and print updated financial statements.
14. Create a final backup after completing all steps.

Step 1: Complete the posting procedures and the closing procedures for other modules. (See suggested order below.)¶

This step is only relevant if your General Ledger module is integrated with other modules within Microsoft Dynamics GP. If GL operates independently, you may skip this step. Ensure all final transactions are posted in all modules except General Ledger before proceeding. Complete any required month-end or quarter-end procedures for these modules as well.

Proceed with the year-end closing procedures for each module in the following suggested sequence:

• Inventory: Complete the year-end process for Inventory Control. This ensures all cost adjustments and inventory valuations are finalized before closing GL.
• Receivables Management: Finalize all customer balances and transactions. Closing Receivables Management ensures accurate accruals and balances flow into the General Ledger.
• Payables Management: Complete the vendor closing process. This includes finalizing all invoices and payments, ensuring correct expense and liability balances are ready for GL closing.
• Fixed Asset Management: Run the depreciation and closing routines for Fixed Assets. Accurate fixed asset balances and depreciation expenses are crucial before closing the fiscal year in GL.
• Analytical Accounting: While there isn’t a separate closing routine for AA, ensure that the dimensions you want to consolidate balances for during the GL close are properly marked. The GL year-end close process in Dynamics GP 10.0 SP2 and later versions automatically handles AA dimension consolidation for marked dimensions, linking AA codes to beginning balance entries in AA tables.

Step 2: Post the final adjusting entries in General Ledger¶

Adjusting entries are necessary to correct any errors in transaction recording or to properly allocate revenues and expenses to the correct fiscal period based on accrual accounting principles. These entries ensure your financial statements accurately reflect the company’s financial position and performance for the year being closed.

Use the Transaction Entry or Quick Journal Entry windows to post these final adjustments directly into General Ledger. If you need to isolate these post-closing adjustments from other fiscal periods for auditing purposes, consider setting up specific auditing periods within General Ledger. This feature allows for clear tracking and reporting of entries made after the standard fiscal periods are closed. Note that if you are using closing periods and perform reconciliation, transactions will move to the first period based on their start date.

Step 3: Print an account list to verify the posting type of each account¶

The posting type assigned to each General Ledger account is critical for the year-end closing process. This setting determines whether an account’s balance is carried forward into the next fiscal year (Balance Sheet) or closed out to the retained earnings account (Profit and Loss). Verify that all Balance Sheet accounts are correctly set to ‘Balance Sheet’ and all Profit and Loss accounts are set to ‘Profit and Loss’. If corrections are needed, use the Account Maintenance window.

To generate the account list for verification:
1. Navigate to the Reports menu, point to Financial, and then select Account.
2. In the Reports list, select All Accounts, and then select New.
3. Enter a descriptive name for your report option, such as “All Accounts List”.
4. Select the Inactive Accounts check box if you want to include inactive accounts in the report; otherwise, leave it unchecked. Remember that inactive accounts without current year activity may be deleted during the close process.
5. Select Destination to choose where the report should be printed or saved, and select OK.
6. Finally, select Print to generate the report.

Step 4: (Optional) Close the last period of the fiscal year¶

Closing the final period of the fiscal year in the Fiscal Periods Setup window is an optional but recommended step. This action prevents users from inadvertently posting transactions to the prior year while you are in the process of closing it and rolling forward balances.

By closing the fiscal periods, you add an extra layer of control, ensuring that transactions are not mistakenly posted to periods or years that should be considered final. Should you later need to post a transaction to a period that has been marked as closed, you can easily return to the Fiscal Periods Setup window to reopen it temporarily. Ensure all necessary transactions across all modules for the year and period are posted before closing the periods.

Step 5: (Optional) Do file maintenance on the Financial series group of modules¶

Running the Check Links procedure on the Financial series group of modules can help identify and potentially resolve data inconsistencies before the year-end close. Access this utility by going to Microsoft Dynamics GP > Maintenance > Check links, and then selecting the Financial series.

Important: Check Links is a powerful tool and its actions cannot be reversed. It is strongly recommended to run Check Links in a test company environment first. Review the report generated by Check Links carefully to understand any changes it proposes before running it in your live company database.

Step 6: Verify the settings in the General Ledger Setup window¶

Check the settings within the General Ledger Setup window to ensure they align with your historical data retention policies. In the Maintain History area, confirm that the Accounts check box and the Transactions check box are selected if you intend to keep historical records of both account balances and transaction details.

Maintaining account history allows you to print financial statements and compare data to historical budgets. Transaction history enables printing detailed historical trial balances and viewing the specifics of past transactions. When these options are selected, the year-end closing routine updates both account and transaction history accordingly.

Step 7: Make a backup¶

Creating a complete backup of all company data is a critical step. This backup should be stored securely and permanently. This backup serves as a snapshot of the company’s financial status at the very end of the fiscal year.

In the event of any issues during or after the year-end closing routine, this backup allows you to restore your data to its state just before the closing process began, providing a crucial recovery point.

Step 8: Print a final Detailed Trial Balance report¶

Utilize the Trial Balance Report window to generate and print a final Detailed Trial Balance report for the year being closed. This report should ideally be printed after all final adjusting entries have been posted in General Ledger.

It is advisable to ensure all transactions for the period and the year across all modules have been fully posted before printing this report. If any additional transactions are posted after this report is printed, it is recommended to print a new, updated Detailed Trial Balance report to maintain an accurate record.

Step 9: Print the year-end financial statements¶

Generate and print all necessary year-end financial statements for your company. These reports provide a summary of your company’s financial performance and position at the end of the fiscal year.

Common year-end financial statements include the Balance Sheet, Profit and Loss Statement, Statement of Cash Flows, and Statement of Retained Earnings. These documents are vital for internal review, external reporting, and auditing purposes.

Step 10: Set up a new fiscal year¶

Before you can perform the actual year-end closing routine in General Ledger, you must define the fiscal periods for the upcoming year. This is done using the Fiscal Periods Setup window, which can be accessed via Microsoft Dynamics GP > Tools > Setup > Company > Fiscal Periods.

Ensure that the new fiscal year is correctly set up with the appropriate start and end dates and divided into the desired fiscal periods.

Step 11: CLOSE THE YEAR¶

This is the core step of the process. To close the fiscal year in General Ledger:
1. In Microsoft Dynamics GP, navigate to Microsoft Dynamics GP > Tools > Routines > Financial > Year-End Closing.
2. In the window that appears, specify the Retained Earnings Account. This account is where the net balance of all Profit and Loss accounts for the year will be transferred. The system defaults to the account specified in your General Ledger Setup, but you can change it here if needed.
3. If you need to distribute retained earnings to multiple accounts (e.g., for different departments), you can use an allocation account or close to divisional retained earnings accounts. Refer to resources on using divisional retained earnings accounts for more detailed instructions.
4. Specify the desired starting journal entry number for the next fiscal year in the Starting Journal Entry box. You can typically accept the default, which is one greater than the highest posted journal entry number for the current year. This number will be used for the journal entry created by the year-end closing routine.
5. To initiate the process, select Close Year.

Crucial Warning: Select Close Year only once. Clicking it multiple times can cause the system to close more than one fiscal year, leading to significant data issues. If the progress window seems stuck, particularly around 50%, do not interrupt the process or restart the routine prematurely. As long as you observe hard disk activity, the routine is likely still running, especially if you have a large volume of data. Allow it to complete.

Upon successful completion, the year-end closing routine performs several key actions:
* Transfers current-year data for each account to account history (if enabled).
* Transfers current-year transaction details to transaction history (if enabled).
* Reconciles and summarizes General Ledger account balances.
* Removes inactive accounts that meet the criteria for deletion (no activity, and depending on GP version and settings, budget accounts may be deleted).
* Moves balances from all Profit and Loss accounts to the specified Retained Earnings account.
* Summarizes Balance Sheet accounts and carries forward their ending balances as the beginning balances for the new fiscal year.
* Prints the Year-End Closing report.

The Year-End Closing report lists the accounts that were closed and the journal entry generated to perform the close. This report is part of your audit trail and should be saved as a permanent record. Please note that this report cannot be reprinted after the routine is completed.

Step 12: (Optional) Close all the fiscal periods for all the series.¶

After successfully completing the year-end closing routine for General Ledger and any other relevant modules, you may choose to close all fiscal periods for all series within the Fiscal Periods Setup window. This is an optional, but highly recommended, step for enhanced data integrity.

Marking all periods as closed prevents accidental postings to those periods from any module, providing a safeguard against errors. If you later find it necessary to post a transaction to a closed period, you can temporarily reopen the specific period in the Fiscal Periods Setup window.

Step 13: Adjust the budget figures for the new year and then print the financial statements¶

With the new fiscal year established and opening balances rolled forward, you should now review and adjust your budget figures for the upcoming year. This can be done using various tools available in Dynamics GP, such as Excel-Based Budgeting, Budget Maintenance, or Single-Account Budget Maintenance. Access these via Cards > Financial > Budgets.

After updating your budgets, print your financial statements again (Profit and Loss, Balance Sheet) to verify that the Profit and Loss accounts were successfully closed to the Retained Earnings account and that the Balance Sheet accounts correctly show their brought-forward beginning balances for the new year. If you use Advanced Financial Analysis (AFA) for reporting, remember to update the report layouts to reflect the current fiscal year by adjusting the year selection in the column definitions.

Step 14: Make a backup¶

Once all year-end closing procedures, including budget updates and final report generation, are completed, make a final backup of your company data. This backup represents the state of your company at the commencement of the new fiscal year, with all prior year closing adjustments finalized and opening balances established.

This backup should also be stored securely in permanent storage. It provides a clean recovery point representing the start of the new accounting period, which can be restored if needed in the future.

Frequently Asked Questions¶

Navigating the year-end closing process can sometimes raise questions. Here are answers to some commonly asked queries related to the General Ledger year-end close in Microsoft Dynamics GP.

Q1: Do I have to close the fiscal year before the first day of the next fiscal year?

A1: No, it is not strictly mandatory to complete the General Ledger year-end closing routine before the first day of your new fiscal year. You can continue to post transactions in the new year even if the previous year hasn’t been closed. However, it is highly recommended to perform the close as soon as possible after the fiscal year ends to finalize the prior year’s data and establish accurate beginning balances for the new year.

Q2: Can I make adjusting entries after I close the year?

A2: Yes, you can post adjusting entries to the most recently closed historical year, provided the Posting to History check box is selected in the General Ledger Setup window. Dynamics GP allows posting one historical year back. When you post an entry to a closed year, the system automatically creates a second entry dated December 31^st of that year to update the beginning balances for the current fiscal year. This ensures that the impact of the adjustment is carried forward correctly.

Here’s an example illustrating how an adjusting entry (dated 12/20/20XX) to a P&L account in the most recently closed year affects the General Posting Journal, showing both the original entry and the system-generated entry to Retained Earnings (dated 12/31/20XX):

Date	Account Name	Debit	Credit
12/20/20XX	Administration Expenses	$500	-
12/20/20XX	Cash	-	$500

Date	Account Name	Debit	Credit
12/20/20XX	Administration Expenses	$500	-
12/20/20XX	Cash	-	$500
12/31/20XX	Retained Earnings	$500	-
12/31/20XX	Cash	-	$500

Q3: After I ran the year-end closing routine, beginning balances were brought forward for some of my sales and expense accounts, and some asset accounts closed to retained earnings. Why did this happen, and how can I fix it?

A3: This issue occurs when the posting type for certain accounts is incorrectly set. Profit and Loss accounts (like Sales and Expenses) should close to retained earnings, while Balance Sheet accounts (like Assets, Liabilities, and Equity) should carry their balances forward. The posting type in the Account Maintenance window dictates this behavior. To correct this, you have a few methods:
* Method 1: Restore your company database from the backup taken before the year-end close. Correct the posting types for the affected accounts in the Account Maintenance window, and then run the Year-End Closing routine again.
* Method 2: For Dynamics GP 2013 R2 (12.00.1745) and later versions, you can use the Reverse Historical Year feature in the Year-End Closing window. Select this option, verify the year displayed, and select Process. This effectively ‘undoes’ the closing of that specific year, allowing you to correct the account posting types and then re-run the year-end close.
* Method 3: For versions prior to GP 2013 R2 or if Method 2 is not preferred, there are manual steps involving adjusting entries to correct the balances. This method is more complex and may require assistance.

Q4: I tried to run the year-end closing routine using divisional retained earnings accounts and received the error message: “Retained Earnings account not found.” How do I resolve this?

A4: This error indicates that the year-end closing routine could not find a corresponding retained earnings account for one or more divisions that have Profit and Loss activity. When using divisional retained earnings, Dynamics GP expects a specific retained earnings account to exist for each unique account segment (often the division segment) present in your Profit and Loss accounts. You must ensure that a retained earnings account exists with the correct account segment value for every division that had P&L activity during the year. Create any missing divisional retained earnings accounts using the Account Maintenance window.

Q5: What happens to unit accounts during the year-end closing routine?

A5: In Microsoft Dynamics GP, unit accounts are treated similarly to balance sheet accounts during the year-end closing process. Their balances are carried forward into the new fiscal year rather than being closed out to the retained earnings account. If you wish to clear the beginning balances for unit accounts, you will need to perform a separate process specifically for that purpose after the GL year-end close.

Q6: I’m preparing to close the year in General Ledger. Must everyone exit Microsoft Dynamics GP before I do the year-end routine?

A6: Yes, it is strongly recommended that all users log out of Microsoft Dynamics GP while the General Ledger year-end closing routine is being processed. If users remain logged in and working, especially in transaction entry windows, there is a risk that their work could be lost if an issue occurs during the closing process and you need to restore from a backup. Having all users out of the system minimizes potential conflicts and ensures a smoother process.

Q7: I want to allocate net profit to retained earnings or capital accounts each month, and I need to split it among three specific accounts. Can Dynamics GP do this automatically during the monthly close?

A7: Microsoft Dynamics GP’s standard monthly closing process does not automatically allocate net profit or loss to multiple retained earnings or capital accounts. The year-end closing routine handles the final net profit/loss transfer. For monthly allocations, you would typically need to perform manual journal entries. You could use a temporary or “suspense” account as the offset for these monthly allocation entries. Then, at year-end, designate this suspense account as the retained earnings account in the Year-End Closing window. This effectively zeroes out the suspense account and completes the allocation cycle. Ensure this suspense account is excluded from your standard financial reports.

Q8: Why is the status of some of my financial reports set to Invalid after certain actions?

A8: If you are using the financial report accelerator file and make changes to accounts through windows like Account Maintenance, Unit Account Maintenance, Mass Modify Chart of Accounts, or the Year-End Closing process, the system marks financial reports that use the accelerator as “Invalid”. This indicates that the accelerator file is out of sync with your chart of accounts. To print these reports again, you must update the financial accelerator file. Navigate to Reports menu, point to Financial, and then select Update Financial Accelerator. Select Update, then Continue, and close the window once complete.

Q9: How are non-financial accounts closed during the year-end closing routine?

A9: Non-financial accounts are handled based on their assigned posting type, similar to financial accounts. If a non-financial account is set to the Balance Sheet posting type, its balance will be carried forward to the new fiscal year. If it’s set to the Profit and Loss posting type, its balance will be closed to the retained earnings account during the year-end closing routine. Ensure the posting type is set correctly based on how you intend the non-financial account’s balance to behave at year-end.

Q10: When I try to post a batch in General Ledger, I receive the message: “Batches cannot be posted while the Year-End Close is in progress.” However, I am not currently running the year-end closing routine. What should I do?

A10: This message indicates that the system still thinks the year-end closing routine is running, often due to an interruption or prior issue. To resolve this, ensure all users are out of General Ledger transaction entry windows. If you are using a Microsoft SQL Server database, you need to clear a record from a system table. Open SQL Server Management Studio, connect to your Dynamics GP databases, and run the following script against your DYNAMICS database:

delete SY00800 where BACHNUMB = 'GL_Close'

This script removes the flag that indicates the GL close is in progress.

Q11: I receive the following message when I try to close the year in General Ledger: “Sorry, another user is closing the year.” No one else is trying to close the year. What should I do?

A11: Similar to Q10, this message means the system has a residual flag indicating the year-end close is locked or in progress. If you are certain no other user is running the routine, you can clear this flag using SQL Server Management Studio. Run the following statement against your DYNAMICS database:

delete SY00800 where BACHNUMB = 'GL_Close'

After running this script, you should be able to access the Year-End Closing window.

Q12: I am performing the year-end closing routine, and it appears to be stopped at 50 percent, and my workstation seems unresponsive. What should I do?

A12: The year-end closing routine can take a significant amount of time, especially if your GL20000 (year-to-date transaction) table is large. The routine processes a substantial volume of data. If you can hear or see hard disk activity, the process is likely still running and has not frozen. Do not interrupt it; allow it ample time to complete. If there is absolutely no hard disk activity for an extended period, the routine may be truly stuck. In that scenario, you would need to restore from your backup taken in Step 7 and attempt the closing process again, potentially after performing data maintenance.

Q13: If an adjusting entry has been posted to a year that is closed, can I print a corrected Trial Balance report for that year?

A13: Yes, you can print a corrected Trial Balance report that includes adjusting entries posted to a closed historical year. To do this, use the Trial Balance Report window. Create a new report option, perhaps named “With Adjustments”. In the report options, ensure that the History check box is selected in the Year area and choose the specific historical year you wish to report on. Print the report to view the balances inclusive of the post-closing adjustments.

Q14: How does Microsoft Dynamics GP determine which financial statement an account prints on when using quick financial statements?

A14: When using quick financial statements, the system primarily uses the Category assigned to the account in the Account Maintenance window (either Balance Sheet or Profit and Loss) to determine which standard financial statement it belongs on. The Posting Type (Balance Sheet or Profit and Loss) is not used for this purpose; its sole function is to determine how the account behaves during the year-end closing routine (carries balance forward or closes to retained earnings). For more precise control over where accounts appear on reports, especially custom layouts, you would typically use Advanced Financial Analysis (AFA).

Q15: When I tried to do the year-end closing routine, I received an error message stating that a single-use batch or a quick journal transaction had not been posted. What does this error message mean?

A15: This message, “A single use batch or quick journal transaction has not been posted yet. Do you want to continue closing?”, appears if there are unposted single-use batches or quick journal entries remaining in the General Ledger module. This is a warning, not an error that prevents the close. The routine will still proceed if you choose to continue. If these batches or transactions are not needed or were created in error, you can safely continue with the year-end close. If they are valid, you should post them before proceeding with the closing routine.

Q16: When I try to do the year-end closing routine, why do I receive the error message: “[Microsoft][ODBC SQL Server Driver][SQL Server]Violation of PRIMARY KEY constraint ‘PK##0671112’. Cannot insert duplicate key in object ‘##0671112’”?

A16: This specific SQL error during the year-end close often indicates an issue related to multicurrency setup or data corruption where a transaction being processed by the close routine contains a currency that is not properly assigned or linked to an account or setup table required by the closing process. Resolving this typically involves identifying the problematic currency or data record. It may require reviewing multicurrency setup or engaging with technical support to pinpoint and correct the underlying data issue in the database before the close can complete.

Q17: Why did the year-end closing process delete some GL accounts that may be tied to budgets?

A17: In Microsoft Dynamics GP 2015 and later versions, the Year-End Closing window includes a checkbox option for Maintain Inactive Accounts. If this option is not marked, the routine is designed to remove all accounts marked as inactive, regardless of whether they have budget amounts associated with them from prior years, as long as they have no current year activity. If you wish to keep inactive accounts, especially those with historical budget data, you must ensure the Maintain Inactive Accounts option is marked before running the close, and then specify whether you want to maintain All inactive accounts or only those with Budget Amounts.

Q18: If I had a failed year end close, can I use the Reverse Historical Year checkbox in the Year-End Closing window in Microsoft Dynamics GP 2013 R2 (and later versions) to try to fix it or un-do it?

A18: Yes, the Reverse Historical Year checkbox, available in Microsoft Dynamics GP 2013 R2 and subsequent versions, is designed to help recover from issues during the year-end close or to correct errors like incorrect posting types. Selecting this option and processing it effectively reverses the last completed year-end close. It will revert the system back to a state as if the year was never closed, allowing you to address the problem (such as data corruption or incorrect account setup) and then re-attempt the year-end closing routine.

We hope this detailed guide assists you in successfully mastering the year-end closing process for General Ledger in Microsoft Dynamics GP. Do you have any experiences or specific tips you’d like to share regarding the GL year-end close? Feel free to leave a comment below!