Closing Operations - IntroductionPurposeClosing operations are periodic tasks and can be subdivided in FI as follows:* Day-end closing* Month-end closing* Year-end closingThe closing operations component helps you prepare and carry out the activities required for day-end, month-end, and year-end closing. For this purpose, the system provides a series of standard reports that you can use to generate evaluations and analyses directly from all of the posted account balance. The system helps you carry out the following:* (Time-based) accruals/deferrals of expenses and revenues * Creating the balance sheets and P&L statements* Documenting the posting dataPrerequisitesTo carry out the closing operations in G/L accounting, you first need to carry out the closing operations in the subledger accounting areas you are using. These include:* Accounts receivable and accounts payable accounting * Inventory accounting* Asset accounting* Payroll accounting

Day-End ClosingDay-end closing includes all the activities required at the end of the day to check that all of the business transactions posted on that day have been correctly processed.No additional postings are required for day-end closing.You can use the following evaluations for day-end closing and for documenting the posting data:* Correspondence with business partners* Document journal* Evaluation of the documents that have not been posted* Compact journal

Day-end closing: checklist (see Appendix)

Month-End ClosingMonth-end closing comprises all the activities involved in closing a posting period.You can carry out the following activities as part of month-end closing:* Open and close posting periodsYou 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.

* Create external reports You can use report programs to create the following reports, for example:* Financial statements* Advance return for tax on sales and purchases

* Document the posting data This includes the following reports:* Compact journal* Balance audit trail* Accounting reconciliation* Account balances* Open item list

* Carry out internal evaluations, such as extracts for downstream applications

* Reorganize and archive documents

Month-end closing: checklist (see Appendix)

Year-End ClosingYear-end closing is split into two phases:* At the beginning of the new fiscal year, you open new posting periods and carry forward the balances from the previous year.* You then prepare and create the financial statements, document the business transactions using the balance audit trail, and archive those documents you no longer need online.

The first posting in the fiscal year automatically opens that fiscal year. You must, however, have opened the relevant posting period first. The SAP System offers a range of reports with which you can carry forward balances into the new fiscal year. During this process, the profit and loss accounts are carried forward to one or more retained earnings accounts. The balances of the balance sheet accounts are simply carried forward into the new fiscal year. You do not have to create special opening financial statements. Any postings you make in the old fiscal year automatically adjust the relevant carry-forward balance. You do not have to close the old fiscal year and carry out the closing postings before opening the new fiscal year.As with month-end closing, you can create all the external reports required, document the posting data, and carry out the internal evaluations.

Year-end closing: checklist (see Appendix)

AppendixDay-End Closing: Checklist

Document and check the posting dataThe following reports are available as examples:

ReportDescription

RFBNUM00Gaps in Document Number Assignment

RFVBER00Outstanding Posting Data

RFBELJ00Compact Document Journal

RFEPOJ00Line Item Journal

Month-End Closing: ChecklistAssetsFixed Assets Execute the depreciation run and update the batch input session (SAP FI-AA)

Current AssetsInventories GR/IR clearing account clarify any differences and correct them if necessary (SAP LO-MM) Clear the GR/IR clearing account (SAP FI)Prerequisite: Accounts have already been maintained by MM Period closing program (SAP LO-MM) Settle the work in process (SAP FI-CO) Post the reconciliation ledger (SAP FI-CO)

Receivables and Other Asset Items Check whether all the billing documents have been posted (SAP LO-SD) Valuate the foreign currency for the open items (SAP FI), see also Payables Valuate the foreign currency for the balances (SAP FI + SAP FI-TR)

Accruals and Deferrals Post accruals/deferrals (SAP FI-TR + SAP FI)

Liabilities and Owners EquityAccrualsPayables Payroll accounting (SAP HR) Valuate the foreign currency for the open items (SAP FI), see also Receivables Valuate the foreign currency for the balances (SAP FI + SAP FI-TR)

Accruals and Deferrals Post accruals/deferrals (SAP FI)

Miscellaneous:Additional Tasks (SAP FI) Post accruals/deferrals (SAP FI) Check whether the accrual/deferral documents have to be reversed Carry out recurring entries and update the batch input session (SAP FI) Reconcile cost of sales accounting/period accounting/profit center ledger (SAP FI/SAP FI-CO) Close the posting period (SAP FI) Run the reconciliation program (SAPF190)This program checks the documents and transaction figures in the R/3 System. You can only execute this run if you do not intend to carry out any postings for the period, otherwise reconciliation differences will occur. You can schedule the job to run in the background.

Printing Reports and Notifications: Balance sheets and P&L statements Advance return for tax on sales and purchases INTRASTAT declarations (SAP LO-MM) Account balances (SAP FI) Journals (SAP FI)

Internal Closing (SAP FI-CO)Internal order and project-related tasks: Transfer postings, surcharges, project interest calculation, settlement

Product and production-related tasks: Release a standard cost estimate, perform inventory costing, transfer postings, surchargesVariance calculation, results analysis, and settlement

Cost center-related tasks: Transfer posting, distribution, assessment, activity allocation, transfer key figures, cost center variance, price calculation

Results-related tasks Evaluate actual postings, transfer external data, distribution, assessment, transfer balance sheet items to PCA

Year-End Closing: ChecklistAssetsFixed Assets Settle the AuC (SAP FI-AA) Execute the depreciation run and update the batch input session (SAP FI-AA) Run the fiscal year change in Asset Accounting (SAP FI-AA)This process creates the balance carryforwards for Asset Accounting. Carry out periodic asset postings (RAPERB00)

Current AssetsInventories GR/IR clearing account clarify differences and correct them if necessary (SAP LO-MM) Clear the GR/IR clearing account (SAP FI)Prerequisite: The accounts have already been maintained by MM Regroup the GR/IR clearing account (SAP FI)Prerequisite: The accounts have been maintained in the system (SAP LO-MM) and cleared (SAP FI)Note: you first have to run the foreign currency valuation for the open items Period closing program (SAP LO-MM) Settle the work in process (SAP FI-CO) Post the reconciliation ledger (SAP FI-CO) Make an inventory of and post the inventory differences (SAP LO-MM) Valuate the inventory (SAP LO-MM) Post the valuation difference manually (SAP FI) Material ledger (SAP LO-MM)

Receivables and Other Asset Items Check whether all the billing documents have been posted (SAP LO-SD) Clarify the open items and differencesWrite off the differences (manually) (SAP FI) Adjust the individual values (SAP FI)Adjust the flat-rate values (SAP FI) Valuate the foreign currency for the open items (SAP FI), see also Payables Regroup the receivables (for example, due date intervals) (SAP FI), see also Payables Print the balance confirmations (SAP FI) Settle the rebate (SAP LO-SD), accruals, if necessary Calculate the interest for interest-bearing receivables (SAP FI) Valuate the foreign currency for the balances (SAP FI + SAP FI-TR) Reconcile the cash journal/print out the journal (SAP FI)

Accruals and Deferrals Post accruals/deferrals (SAP FI + SAP FI-TR)

Liabilities and Owners EquityAccruals Holiday pay provision (SAP HR) post manually in FI Accruals for rebates, discounts, and commissions (SAP LO-SD)Payables Payroll accounting (SAP HR) Valuate the foreign currency for the open items (SAP FI), see also Receivables Valuate the foreign currency for the balances (SAP FI + SAP FI-TR) Regroup the payables (for example, due date intervals) (SAP FI), see also Receivables

Accruals and Deferrals Post accruals/deferrals (SAP FI)Miscellaneous:Additional Tasks (SAP FI) Post accruals/deferrals (SAP FI) Check whether the accrual/deferral documents have to be reversed Carry out recurring entries and update the batch input session (SAP FI) Carry forward the balance Check the balances carried forward against the closing balances of the previous year Start carrying forward the balance, if necessary (SAP FI) Reconcile cost of sales accounting/period accounting/profit center ledger (SAP FI/SAP FI-CO) Reconcile the asset history sheet and account balances Close Asset Accounting (SAP FI-AA) Close the posting period (SAP FI) Run the reconciliation program (SAPF190)This program checks the documents and transaction figures in the R/3 System. You can only execute this run if you do not intend to carry out any postings for the period, otherwise reconciliation differences will occur. You can schedule the job to run in the background. Balance audit trail (SAP FI)

Printing Reports and Notifications: Asset history sheet (SAP FI-AA) Balance sheets and P&L statements (monthly and annual reports) Advance return for tax on sales and purchases (returns propared normally quarterly) INTRASTAT declarations (SAP LO-MM)

Internal Closing (SAP FI-CO)Internal order and project-related tasks: Transfer postings, surcharges, project interest calculation, settlement

Product and production-related tasks: Release standard cost estimate, perform inventory costing, transfer postings, surcharges, variance calculation, results analysis, and settlement

Cost center-related tasks: Transfer posting, distribution, assessment, activity allocation, transfer key figures, cost center variance, price calculation

Results-related tasks Evaluate actual postings, transfer external data, distribution, assessment, transfer balance sheet items to PCA