Year End Planning

Use the information here at your own risk.
SouthwareAnswers does not provide tax advice. Please contact your CPA for specific information about your requirements.
If you are not sure how to apply the information available, please contact your Southware Solutions Partner.

Before Year EnD

Year End Timing

Inventory Sales

Service Management

Job Cost

Accounts Receivable

Accounts Payable

Payroll

Cash Flow Ledger

Fixed Assets

General Ledger

W2 & 1099 Printing

Payroll Updates

1. Fiscal Year vs. Calendar Year - These procedures are designed for use when fiscal and calendar year-end occurs simultaneously. When the fiscal year-end occurs in a month other than December, you will have several optional procedures. Usually the year-to-date information is kept for a fiscal year, but it may also be kept for a calendar year even if the fiscal year is different. Please contact your Southware Solution Partner with any questions.
2. Reminder about spooling reports - When spooling (write to disk OR option 2), it is important to name the spool files appropriately for later retrieval & audit purposes.  Plan accordingly. SouthWare uses the program name for the spool file. We recommend using that name but adding the date to the name. For example spooling the Inventory Valuation will result in a file name of RSVALRPT.SP. Use the F2 option when spooling to change the name to RSVALRPT123103.SP or SVALRPT031231.SP so that the information can be preserved.
3. All modules transactional data cleanup - Year end is a good time to review all transactional files: quotes, sales orders, service orders, purchase orders, etc. to ensure that your environment is clean and accurate. Review and remove transactions that were done in error or not posted.
4. We do not recommend purging data in any application!

 

Year-End Processing Video for 2022

Before Year End

1. Do your normal monthly processing.
2. Do your quarter processing if using Payroll.
3. Make a separate backup to keep permanently. Verify this backup and do not proceed until complete.

 

Year End Timing

1. Year end processing should be completed for all other modules before doing year end for General Ledger. Follow the instructions specified below for each SouthWare module you have licensed.
2. Year end for General Ledger may be run after all other modules and prior to receiving final adjustments from your accountants. Some information requires GL year end in order to be accurate like ExecuMate and Cash Flow Ledger. You are allowed to make Prior Year “PY” journal entries to the GL for the prior year which carries all information forward to the current year. Year-end should be run within the first couple of weeks of January. With prior year entries, there is no reason to keep GL open for an extended period of time.
3. Only one year can be open at a time in SouthWare. If you elect to leave your year open for several weeks you will not be able to post to the permanent ledger for the new year and produce financial statements until the prior year is closed. The one exception to this rule is ExecuMate—information in ExecuMate does look at not-posted transactions.

 

Inventory Sales

Does not have a formal year-end process as long as you use SouthWare’s Accounts Receivable.

If you do not use SW AR you must run Periodic, Inventory Sales & IS-06-10 – Clear Other YTD Info (or IS0610).

• Completing your normal month-end procedures.
• Update Stock Order Controls (choose Periodic at the top of your menu and Inventory/Sales and Update Stock Order Controls). Or type IS0609 in launch bar.
• Run an Inventory Valuation report (spooling it if desired) to record the item
  quantities and costs as well as valuation - choose Reports, Inventory/Sales, All
  Reports and Stock Valuation Report. Or type IS0503 in launch bar.
• Run Stock Trial Balance (choose Reports, Inventory/Sales, All Reports & Stock
  Ledger Trial Balance). Or type IS0520 in launch bar.
• You may optionally process and post a Physical Inventory – Periodic, Inventory
  Sales & IS0604xx. Or type IS0604 from launch bar.
• NOTE: This process can create GL distributions based on the settings in your IS
  control record (Set- up/Inventory Sales/The Control Record, field 24 or IS-08-02 field 24). Please review newer options available prior to beginning a Physical Inventory. Physical Inventories should be completed prior to processing year end.

 

​Service Management

Does not have a formal year-end procedure

Due to the transactional nature of service orders, this is a good time to:

• Schedule a review of open service orders
• Clean up old transactions
  
• Review contracts and pricing to ensure accuracy
  

 

Job Cost

Complete normal month-end process 
(Main / Job Cost / #5 Periodic and Year End Processing / #6 Clear Year-to-Date Totals)

 

Accounts Receivable

1. Select year-end processing (Periodic Processes, Accounts Receivable or AR0606) to close and clear all year-to-date accumulations. This step may be skipped if processing a fiscal year-end and you desire to track A/R information on a calendar year.
   
2. Run an Aging report (Reports, Accounts Receivable or AR0501) and Trial Balances (AR0502) and any other point in time reports prior to closing the year.
   

 

Accounts Payable

Does not have a formal year-end procedure

There is not a year end process in Accounts Payable since the excellence history is perpetually maintained. However, there are several optional processes that may be executed at this time.

• Process 1099s (Periodic Processes, Accounts Payable or AP0506). For calendar year processing only and if you have captured 1099 data during the year for any vendors. SouthWare can produce three formats for the 1099-NEC and 1099-MISC forms: printed forms, tape format, diskette format.         
  ​ * Note: If you are not processing 1099s, you must still clear vendor totals.  If you are processing 1099s, DO NOT clear vendor totals until you have finished processing 1099s.​
• Choose #6 - Report and Clear YTD 1099-Misc Info from the menu choices under Period Processes.

• Build the 1099 work file.
  
  • Verify that you are updating to the correct year. The AP control record shows the date that the last 1099 file was update
    
  • Modify/Maintain Company Information if necessary by reviewing the 1099 Control Record. This is where you can change address, contact and telephone number information
    
  • If a work file already exists, you have the option to save it under a different name prior to creating a new one 

• Review / Print a 1099-Misc Edit List. ​Review the work file by printing an edit list.  Choose the 1099 form type 1099-MISC or 1099-NEC.
• If you need to make any changes manually, you can change data by using Edit the 1099-Misc work file menu option.
• If your data looks correct, you can clear the 1099-Misc information (AP-05-05-03). ** You must clear 1099-MISC information prior to doing an A/P payments in the new year.**
• Create 1099-Misc forms. For printed forms you must specify the form type 1099-MISC or 1099-NEC.  You may specify a minimum 1099 amount (vendors who were paid less than this amount will not receive a 1099 form. If you select the E-Send (option 3) you must also enter the payment year.

• A question will ask if this is a correction run. If you have already submitted 1099 information and are preparing corrected information, enter "Y" and the system will mark the Corrected Return box on the form. Otherwise, choose "No".
  The amount box used on each form is controlled by the field number specified in the vendor record (Field 21 in AP-06-01 or Main/Accounts Payable/Vendors):        

          1 = Rents
          2 = Royalties
          7 = Non-employee compensation
          F4 = Special - additional 1099 Misc Types (choices below):

• If you are producing 1099-MISC information on tape the file names will be located in your company sub-directory and the file name will be IRSTAX. You must load this file to a magnetic tape and send the tape to the Federal Government. See the current IRS publication on 1099-MISC reporting for more information.
• If you are producing 1099-MISC information on diskette the file will be located in your company sub-directory and the file name will be IRSTAX. You must load this file to diskette and send it to the Federal Government. 
• Forms may be ordered from SouthWare Forms

• If you have over 800 1099 vendors, a disk file named: IRSTAX.001 will be create for the first 800 vendors. The next 800 vendors will go into a file: IRSTAX.002 and so on for each additional 800 vendors.

 

Payroll

Make sure you have a separate backup of your Payroll files to keep permanently before proceeding

You are ready for year-end processing in Payroll when you have done the processing for the fourth quarter (printed 941, SUI and City tax reports and reset QTD totals.

Use the information here at your own risk.

SouthwareAnswers does not provide tax advice. Please contact your CPA for specific information about your requirements.

​If you are not sure how to apply the information available, please contact your Southware Solutions Partner.

Calendar Year-End

• Build the W-2 work file (Periodic/Payroll/Year end or PR060201). See W-2 Documentation for more information (Payroll W2 Guide). Please review the documentation before proceeding with creating and printing W2s.
• To ensure the accuracy of your W2 forms and magnetic media please test your totals and files before printing and submitting your W2s by following the steps below.
• Build the W2 work file using the instructions from your circular E and the PR W2 documentation (Payroll W2 Guide)

Print a full-employee listing (Reports/Payroll Employee Listing or PR040901) for all include YTD Federal and State Accumulations. Include Recurring Deductions/Earnings on the report.

• Print the W2 Edit Listing (Periodic/Payroll/Year end or PR060202) for all employees
• Compare the federal and state taxable totals along with the tax amounts.
• Print the Cumulative Deducts/Earnings Report (Reports/Payroll/Cumulative   Deducts/Earnings or PR0405) to verify the deduction and earnings totals on the W2 edit listing match the YTD totals from the Recurring Deduction/Earnings file.
• Print the W2s (Periodic/Payroll/End of Year/ W2 Processing / Produce W2 forms/Magnetic Media or PR060204). If printing W2s on a laser printer: Make sure the printer you select has the laser flag set to "Y" (yes) in (Setup/ Hardware setup/ Printer Definition or XX-05-05-01 in field #7).

In rev. 11 and up only you may print 4-to-a page W2s per employee. This is EMPLOYEE COPIES only. In this mode, you MUST PRINT 4 W2s per employee. This is exactly one page. WARNING: This form requires 8 lines per inch init string. Also the top margin should be 3/8 inches.

​NOTE: You may want to print an alignment test before printing the W2s to insure the data lines up with the forms you have purchased.  If the alignment is not correct, you must use init strings to change the left margin and/or the top margin (these values are the decimal
representation).

• ​ If left margin needs to move to the right less than one column (027 038 108 # 085)
  Where # is the # of Decipoints (1/720")
•  If top margin needs to move down less than one line (027 038 108 # 097 076)
  Where # is the # of Decipoints (1/720").
• If left margin needs to move to the right at least one column (027 038 097 # 076)
  Where # is the number of columns.
• If set the top margin: (027 038 108 # 069) where # is the number of lines.

NOTE: When replacing # with a value, you should enter the number in the character set field. For example, to move the left margin to the right two characters, the decimal values would be: 027, 038, 097, 050, 076. 050 is the decimal representation for 2.

• If you are submitting W2s to the SSA, download the MMREF test software(ACCUWAGE) from http://www.ssa.gov/employer/software.htm and install the software.
• Test the magnetic file created from SouthWare (W2REPORT) using the SSA software. The magnetic media file will be created in your SouthWare data sub-directory.
• Using the AccuWage software - verify the totals record (RT record) with the total from the W2 Edit Listing. 

​Reset the YTD totals (Periodic/Payroll/Year End/Reset Calendar Fiscal YTD Totals or PR0603)

1. This option should be done before a payroll is run for the new year
2. You will be asked to reset YTD information used for tax reporting (Calendar Year). Fiscal Year-End Note: You are also asked about clearing YTD fiscal information. If your company is not on a calendar year, you should not reset fiscal information until the end of your fiscal year. If you answer Y to the YTD question, the program will ask if you want to clear sick leave due, vacation due, and holiday due fields in the employee file.
3. You also have the option to clear labor distribution YTD.
4. The appropriate YTD reset date will update in the control record. 
5. Under resetting the Calendar/Fiscal YTD Totals, you will also have the ability to reset Sick Leave, Vacation, Holidays, and Labor Distribution (please refer to SouthWare Documentation for instruction).​​​

​**** NOTEWORTHY ****

Recurring Deductions/Earnings: The calendar or fiscal accumulations will be cleared according to the answers to the clear questions. In addition, during the calendar year end, records which were set to inactive status by the system because the YTD limit was reached will be re-activated automatically. Any remaining inactive records should be deleted using the Maintain Recurring Deductions/Earnings. If you have any recurring records in which you set the "Reset YTD?" flag to N, these will not be cleared during the calendar year reset. They will also not be reactivated. You must manually reset these records if needed.

Do not rebuild your W2 work file once you have cleared YTD information.

The work file can't be built properly without the YTD data. If you accidentally rebuild the work file you will either have to:

• Restore from a backup prior to when Year-End Clear was done and rebuild the work file.
• Or restore your W2 work files (PW2F3.FIL and PW2F5.FIL) from backup.

Check to make sure you have the correct FICA tax rates in the Payroll control file before you process your first year payroll checks. (PR0802 or Setup/Payroll/Company Control Info).

Make sure to update your Federal and State tax table from the latest Circular E. - Payroll portal / File Maintenance

Click here for Payroll setups for the new year

 

Cash Flow Ledger

Does not have a formal year-end procedure

Although there is no specific year end processing for this module it is recommended that you ensure the following:

• Validate that all monthly bank reconciliations are current prior to closing the year in General Ledger
• Reconciling bank accounts is a good audit that all transactions were properly recorded in Accounts Receivable and Accounts Payable
  

 

Fixed Assets

• Fixed Assets Year End Processing (Periodic/Fixed Assts/Year End Processing or FA-03-03). For this program will update the beginning of year information into the asset file. For all schedules including 1, it will update the last year-end fields in the schedule file.
• Close each schedule one at a time by entering the last year closed date and the date to close through. This will prevent these depreciation records from ever being computed again. The "Accumulated Depreciation Beginning of Year" fields will be rolled forward for each asset record. (If you do not interface to GL you do not need to run this process.)
  

 

General Ledger

Make sure you have a separate backup of your G/L files before proceeding.

You might consider resetting your Next Transaction # back to the original value after you run the Year-End Program. 

​Contact your partner with questions.

• Year-End Processing (Periodic/General Ledger/Year End or GL06).
  ​This option lets you close out the current year and prepare the records for the New Year. All other applications should be closed before closing GL. You may continue processing in the new year as well as making prior year adjustments as "PY" types.

• Closing GL is the final step in the year end process - NOTE: Prior to running year end you must set up at least one capital account for retained earnings. You must set up an account per profit center if you choose to distribute the profit.
• Make Year-End Adjustments (Periodic/General Ledger/Year End or GL0601).
  This lets you make any final G/L adjustments and/or accruals for the first year before you close. You don't need to transfer net income to retained earnings or zero out the income and expense accounts - this will be done automatically by the system. (If you finish all the year-end processing and then discover you need to make additional adjustments to the year, you may still adjust the prior year using "PY" transaction type.)
• Close out your last fiscal period (Periodic/General Ledger/Year End or GL0602). 
  If you entered year-end entries these must be posted in the last period. This is the same process as month-end G/L close.

• Print Financial Statements (Periodic/General Ledger/Year End or GL0603).
  You should have run when the period was closed, but if you made more adjustments since then you will want to run your statements again
  
  ​After the year-end process, you may print prior year statements from your comparative information if you need more copies. Any budgets for the year will have already been cleared.

*** OPTION: navigate to Setup - GL - Control Record (or GL0801) and record the last Journal Entry number prior to closing.

Run the Year-End Program (Periodic/General Ledger/Year End or GL0604)This year-end program performs the following functions:

1. Transfers net profit and loss to retained earnings and clears all the balances in the income statement accounts.
2. Carries all account balance records forward as comparatives, moves the ending balance for all balance sheet accounts forward as beginning balances, and clears out the current year fields.
3. Resets all the year periods (Next Year becomes Current Year; Current Year becomes Last Year, etc.) The next year periods are created by incrementing the period dates for the new current year by one. 
4. Resets the next transaction number in the control record to 1. (You can optionally reset this value to the last number you noted at the start of the program!)
5. Optionally zeroes out or updates the original and current budgets for the New Year.
6. Purge transaction history (Periodic/General Ledger/Year End or GL0605). This selection is a part of the year-end process but we DO NOT recommend you purge data, please contact us with questions. 

• Prior Year Transactions may be made after you have closed the year to affect last year's information. The date you enter must be in the prior fiscal year. Posting this type of transaction will update prior-year balances (in the account file) through the end of the year and the beginning balances for the current year. If the adjusted account is a Balance Sheet account, the transaction will affect the beginning balance of the current fiscal year. If the adjusted account is an Income Statement account, the transaction will affect the beginning balance of the Retained Earnings account defined in the control record (GL-08-01). In either case the adjustment of balances will be reflected in any closed periods in the current fiscal year. If you make a prior-year adjustment, you should re-run financial statements for any affected periods. 
• Example of a PY Entry: Forgot to post cash sales of $100.00 from November 2005, and you are now in February of 2006 (and you use a calendar fiscal year).
            Cash Account 1010-000
            Sales Account 4010-000
            Retained Earnings 3040-000
  In the GL-01-01, enter a "PY" type transaction using a date of 11-30-2005. (If you don't enter a transaction type of "PY", the entry program will not allow a date outside the current fiscal year.)
  Debit 1010-000 for $100.00 and Credit 4010-000 for $100.00
  When you post this transaction (GL-01-03), the balance for the cash account will be increased by $100.00 for periods 11 and 12 of the prior year and also for periods 1 and 2 of the current year.
  The Sales Account will be increased by $100.00 for periods 11 and 12 of the prior year only and the retained earnings account balance (3040-000) will be increased by $100.00.

Use the information here at your own risk.
SouthwareAnswers does not provide tax advice. Please contact your CPA for specific information about your requirements.
If you are not sure how to apply the information available, please contact your Southware Solutions Partner.