what is YEC
Year-end close process involves closing the financial books for a fiscal year, ensuring all transactions are posted and summarized, and preparing the system for the new fiscal period.
Configuration
Main Account - Main Account Type and Openning Account
Fiscal Calendars and Periods:
- Establish the fiscal year and its accounting periods in the system.
- Verify the status of periods to control transaction postings during and after closing.
Ledger Setup:
- Ledger and financial dimensions are correctly configured for closing
- Link the year-end close templates to relevant ledgers.
- Configure task parameters specific to the ledger requirements.
Year-End Close Templates: Standardize the year-end close process.
- Create templates with sequences of tasks to automate closing operations.
- Templates may include tasks like financial data validation, transaction posting, balance rollovers, and report generation.
Running the Year-End Close Process
Pre-close Validation
- Verify that all financial transactions for the year are posted.
- Ensure no open batches or unposted journals remain.
Execute Year-End Close Template
- Run the predefined template which executes closing tasks in order.
-Closing open fiscal periods - Transferring balances to retained earnings
- Resetting account balances for the new fiscal year
- Generating closing reports
Review Close Results
- Check for warnings or errors.
- Review generated reports and journal entries.
- Confirm that balances have correctly rolled over.
Open New Fiscal Period
- Enable posting in the new fiscal year.
- Notify relevant users that the ledger is ready for new transactions.
Best Practices
- Use test environments to validate templates and closing procedures.
- Communicate timelines and responsibilities across finance teams.
- Perform closing tasks during off-peak hours to minimize system impact.
Reference:
Year-end close - Finance | Microsoft Learn