Year End Procedures for Versions 6.9 and prior

Year End Procedures

This document outlines the tasks required to successfully complete a year end.  These processes affect virtually all aspects of REALedger and should not be undertaken without a thorough understanding of the results. We recommend reviewing this thoroughly before executing any year-end processes.

REALedger has two distinctly unique year end processes that need to be run; the Close at End of Calendar Year and the Close at End of Fiscal Year.  The calendar year end must be closed before 1099s can be printed. The fiscal year should be closed after posting.  Note: You can do journal entries after closing your fiscal year. For a fiscal year end other than 12/31/xx, you will not run the fiscal year end close until the appropriate time.

Calendar vs. Fiscal Years

Calendar year refers to the twelve-month period that runs from January 1st to December 31st.  Fiscal year refers to any twelve-month accounting period, the beginning and end of which are defined by the company.  An example would be:  July 1st through June 30th.

Calendar Year End

This utility should be run after you have printed all checks (accounts payable, payroll and sales) for the calendar year, either at the close of business on December 31st, or when you return to work in January.

This process does two things: it zeros YTD accumulations in the Agent, Vendor, and Employee Master files so that YTD fields are blank for the start of the new year. This prevents earnings from one year getting co-mingled with earnings from another year. Secondly, it creates copies of all Agent, Vendor, and Employee Master Files, so that 1099 and W2 tax forms can be generated.

Prior to running the Close at End of Calendar Year, proceed with the following:

Pay all Vendors, Agents, and Employees

Have all users log out of the REALedger application including yourself. To check if everyone is logged out, navigate to System > Maintenance > System Information > Show Current Connections > Enter Password > OK

Create a new folder in the REALedger directory called CYREND_20xx.

Make a backup of the following files: REAL_prg.mde (usually C:\REALedger). To check the location, right click on the REALedger application icon and select Properties.  The location is displayed in the target field, the folder(s) specified before \Real_prg.mde.  By default, the file will be named Real_prg.mde, but may have been changed to <anything>_prg.mde.

* If running multi-companies, back up all .mdb and .mde files in all directories.

Launch REALedger as the master user. This is very important because any other username will require reloading from backup and restarting the process.

Navigate to System > Maintenance, run the utility to Re-Create Agent Year to Dates with Ending Date of 12/31/yyyy, where yyyy is the calendar year you are closing.  Run the utility once with the update all month to date and year to date totals button checked, and again with the update pre- and post-split deduction totals button checked.  This will total the YTD accumulations in the Agent Master Files in preparation for 1099s.

Navigate to System > Maintenance, run the utility to Re-Create Employee Year to Dates with Ending Date of 12/31/yyyy, where yyyy is the calendar year you are closing.  This will total the YTD accumulations in the Employee Master Files in preparations for W2s. It is not necessary to run this utility if you do not use Payroll module.

Navigate to System > Maintenance, run the utility to Re-Create Vendor Year to Dates with Starting Date of 01/01/yyyy and Ending Date of 12/31/yyyy, where yyyy is the calendar year you are closing.  This will total the YTD accumulations in the Vendor Master Files in preparation for 1099s.

Navigate to System > Processing > Close at End of Calendar Year enter the calendar year end date.

Select Close calendar year. If you are Closing the Calendar year on any other date rather than 12/31/yyyy, where yyyy is the calendar year you are closing, then you will need to recreate all YTD totals for 12/31/yyyy, where yyyy is the current calendar year.

Do not run this utility twice for the same calendar year otherwise will require a full data restore.

Once your calendar year end close has been completed, 1099 and W-2 records can be viewed and modified.

  • Agent > Maintenance > 1099 Data
  • Accounts Payable > Maintenance > 1099 Data
  • Payroll > Maintenance > W-2 Data

 

You can modify the information in these screens at will, without affecting the current Agent, Vendor, or Employee Master Files. When modifying the 1099 and W-2 records, be very careful that you are on the record for the correct calendar year, as there is a record for each year an agent, vendor or employee has been with your company.

Review & Print Agent & Vendor 1099s

Navigate to Reports > 1099s.  Check mark the box to combine 1099s for agents and vendor 1099s for same tax id if appropriate, and include all data.  There is no need to enter a beginning or ending count, as REALedger will auto-populate these for you. Click on the print 1099’s button and a preview of the forms will come to the screen.  REALedger prints data on a blank 1099 form available at any retailer or online.

Note that if it is necessary to enter transactions (sales, accounts payable or payroll) in a calendar year that has already been closed, you must do the following:

  • Change the processing for date on the Main Menu to the day you want applied to the transaction/s
  • Enter the transaction/s as you normally would
  • Change theprocessing for date back to the current date
  • If the transaction will affect the 1099 or W2, then you will need to edit the 1099 data manually. (See instructions above for where to modify 1099’s and W2s)

 

Review & Print Employee W-2s

Navigate to Payroll > Reports > W-2s.  Enter the year end date and click on the print Pre-W-2 report button.

  • Compare the Total Gross Earnings to the Grand Total YTD Earnings on the Employee YTD Earnings Totals   Research any discrepancies.
  • Compare the various deduction totals on the Pre-W-2 Report with the appropriate deduction totals on the Employee YTD Earnings Totals.

 

Fiscal Year End

Navigate to System > select Close at End of Fiscal Year.  Closing the fiscal year creates the balance forward records for the Balance Sheet accounts (Assets, Liabilities and Equity) and sums the Income Statement accounts (Revenue, Cost of Sales and Expenses) to roll up the YTD Profit/(Loss) to Retained Earnings.  This will zero out the account balances on the Income Statement for the new fiscal year.

Prior to running the Close at End of Fiscal Year utility, you should:

Post the General Ledger through your Fiscal Year End date.

Create a new folder in the REALedgerdirectory called FYREND_20xx.

Make a backup of the following files:

REAL_prg.mde (In the REALedger folder, usually C:\REALedger). To check the location, right mouse click on the desktop icon, and select properties.  The location is displayed in the target field, the folder(s) specified before \Real_prg.mde.  By default, the file will be named Real_prg.mde, but may have been changed to <anything>_prg.mde.

REAL_dat.mdb** (In the REALedger folder on the server). To check its location, launch REALedger and navigate to System > File Maintenance > System Information.  The location is displayed in the current data field.  By default, the file will be named Real_dat.mdb, but may have been changed to <anything>_dat.mdb.

REAL_arc.mdb** (Same location as REAL_dat.mdb)

REAL.mdw  (Same location as REAL_dat.mdb)

*If you are running multi-companies, back up all .mdb and .mde files in all directories.

Relaunch REALedger and navigate to System > Transactions/Processing > Close at End of Fiscal Year.  Enter the fiscal year end date.

Select Close Fiscal year

Note: If it is necessary to enter a transaction in a prior fiscal year that has already been closed, you must do the following:

  • Change the processing for date on the Main Menu to the day you want applied to the transaction/s
  • Enter the transaction/s as you normally would
  • Change theprocessing for date back to the current date
  • Post the period for the transaction/s you entered
  • Navigate to System > File Maintenance > Re-Summarize G/L for Financial Statements.  Enter a starting and ending date for the fiscal year that you made the transaction/s in.  Put a checkmark in the recreate balance forward records and the summarize fiscal year transactions  Run it again for each subsequent fiscal year through the current year.

 

Contact Emphasys Software support if you require assistance on year end closing.

 

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