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End of Month close process and reports

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End of Month close process and reports

This article reviews options, considerations, and best practices to ensure a smooth and accurate month end close.

You may opt to consolidate the A/R and A/P closes in

File > Company > Master: Accounting, One Step End of Month Closing for A/R & A/P.

Setting the consolidated close will remove the separate buttons for closing A/R and A/P. You will see a single button at the bottom of the window.

Companies using the consolidated close may also implement an automatic accrual of the value of uninvoiced purchase orders by setting an uninvoiced PO Liability account in the G/L Control Table: Accounting > General Ledger > G/L Control Table. At the time of monthly closing, the system will automatically create a journal entry accruing the value of the current uninvoiced material (by branch) into the period being closed, followed by an automatic reversal in the next accounting period.

  • (1) To use this option the Company Master setting One Step End of Month Closing for A/R and A/P must be set to Y.
    (2) Users of this workflow should disable period changes for vendor merchandise invoices: set the Company Master setting Allow Accounting Period Change in A/P to N. All vendor invoices must be entered to the current processing period to avoid overstating inventory G/L value in the closed period.
  1. Determine the timing of the close. Inform is a period-based accounting system, which relies on user-initiated closes to default posting into the next accounting period. The system bases posting on the accounting period, regardless of the transaction date.
    1. Closing at the end of the last day of each month ensures that transactions contained within the accounting period are dated accordingly. This option is ideal for companies posting sales and cash receipts on the day they occur.
    2. Closing at the beginning of the first day of the month is optimal for companies processing sales and cash receipts on the day following occurrence. Note that there may be items dated outside the accounting period..
  2. Before closing, ensure that all of the following processes are complete for inclusion in the current accounting period. Pay particular attention to batch processes, where the individual entries remain in suspense until the entire batch is posted.
    1. Sales Invoicing: Sales > Invoicing > Invoicing
    2. Point of Sale Posting: Sales > Order > Point of Sale
    3. Cash Receipts and Adjustments: Accounting > Accounts Receivable > Cash Receipts Posting
    4. Stock Transfers: Inventory > Stock Transfer Entry: search
    5. Stock Receipts: Purchasing > Stock Receipts
    6. Inventory Adjustments Inventory > Inventory Adjustment
    7. A/P Invoice Entry: Accounting > Accounts Payable > Invoice Entry
    8. Cash Disbursements Accounting > Accounts Payable > Cash Disbursements

    *There is a flag in File > Company > Master > Accounting to enable entry of A/P invoices into a closed period. Enabling this option is recommended to ensure that both modules are closed together. The period bypass applies to invoice entries only and not to disbursements. Users accruing the value of uninvoiced PO’s should not enter merchandise invoices to a closed period.

  3. Institute a posting blackout for the time it takes to complete this process, including customer statements, if applicable..
    1. Any process that changes a G/L account balance or product quantity is prohibited. These functions are detailed in points 2a through 2h above.
    2. Purchase orders, sales orders, reports, and system inquiries may continue as normal while the period is being closed.
  4. If you have multiple branches, be sure to communicate the closing requirements and timing to all locations because the close applies to the entire organization. This is especially important for branches located in different time zones.
  5. If you produce customer statements and manually run finance charges–Accounting > Accounts Receivable > Finance Charge Update–you must complete this process before closing A/R. For consistency, DDI recommends using the Job Stream to incorporate finance charge calculation and statement production into the A/R close as a one-step process.
  6. If you produce statements without finance charges, you may process them before or after the close.
  7. It is highly recommended that you close the A/R and A/P modules at the same time. See section Consolidate close option, above.
  1. Initiate the user posting blackout. Go to Utilities > System Users & Locks to determine if there are any active users. The presence of any record locks indicates that there are still active users.

  2. If the Job Stream is set to include customer statement processing (with or without finance charges), skip steps 4 and 5. The statements will begin printing after Close A/R is clicked.
  3. If the Consolidated Close is set in the Company Master, there will be a single Close Month button to replace the separate Close A/R and Close A/P functions. Steps 6 and 7 will be combined when clicking Close Month.
  4. Run Finance Charge Update Accounting > Accounts Receivable > Finance Charge Update. For more information on setting up Finance Charges and Customer Statements, see Customer statements & finance charges.
  5. Produce Customer Statements Accounting > Accounts Receivable > Customer Statements.
  6. Close the A/R module Accounting > End of Month Closing & Journals > Close Accounts Receivable. This process will take several minutes. Do not interrupt the process or enter any transactions during this time.
    1. If the Job Stream is enabled, a window will prompt to choose the statement printer.
    2. Faxed and emailed content will generate according to the settings in the Phantom Monitor. Go to Accounting > Accounts Receivable > Customer Statements, and then enter a date and click Sent Results to produce a Sent Results Report of submitted faxes and e-mails.
    3. Accounts Receivable will close immediately after statements are generated.

    4. If you use Divisions: Closing the A/R module consolidates the stock transfers and generates Division Billing customer invoices. The A/R module must be closed prior to A/P for divisional systems and it is recommended to set the consolidated close to avoid closing the month out of order.

  7. Close the A/P module Accounting > End of Month Closing & Journals > Close Accounts Payable. This process will take less than a minute and is necessary only if you don't use Consolidated Close. Refrain from entering any transactions while in progress.
    1. If you are accruing uninvoiced inventory, an automatic journal entry will be made to accrue the value of uninvoiced PO’s by debiting Inventory (by branch) and crediting uninvoiced Material Liability (as specified in the G/L Control Table).
    2. All other users will need to consider the value of uninvoiced PO’s at the end of the month when reconciling inventory.

    3. If you are using divisions: Closing the A/P module generates Division Billing vendor invoices. The A/R module must be closed prior to A/P for divisional systems and it is recommended that the consolidated close option is used to avoid closing out of order. For more information about divisions, please refer Using Branches and Divisions.

  8. Users may resume normal system activity after A/R and A/P modules are closed. The system will display an indication that the periods are closed and the system is operating in the next period.

  1. Retrieve reports from the End of Month Closing & Journals Attachments location. For more information about each report, see the Month end Closing Reports - Attachment Tab section below.

  2. Reconcile the reports to their corresponding G/L accounts.
    • Accounts Receivable Aging and Accounts Payable Aging
    • Inventory Value by Warehouse and uninvoiced Purchase Orders
    • Warranty Pending and Warranty Receivable (for organizations using Warranty Module)
    • Point of Sale Deposits (for organizations using Point of Sale Workflow)
  3. Produce any desired Journal reports, including the Sales Tax Journal. All reports available on the EOM Closing & Journals menu are period-based and may be generated after the close. For more information about sales tax, please refer to Understanding the Sales Tax Journal.
  4. You may complete other accounting functions, such as bank reconciliation and journal entries, after the close. They are not contingent on operating in a specific period.
  5. Please note that the General Ledger is controlled by a separate annual close process and therefore does not conform to a period posting cutoff unless manually enforced. This process is covered in End of year close process.

At the time of your first end of month close, the system will generate a new folder called EOM.REPORTS on your DDI Server. The path is: DDI (D:) > IBM > ACCOUNTS > DDI > EOM.REPORTS. Please do not move or delete any server content. It is stored permanently for future reference.

To facilitate report storage and retrieval, we’ve also made this content available in
Accounting > End of Month Closing & Journals > Attachments.

Attachments Location: These reports are permanently stored with the latest on top.

End of month reports may be also captured manually to supplement Excel versions. Many offer detail and summary options, as well as the ability to produce by individual division or branch. Please note that manually produced reports should be captured immediately before closing A/R and A/P for accuracy.

Please note that the captured reports represent point-in-time information that cannot be retroactively requested.

Journal reports, available on the End of Month Closing menu, represent date range information that may be requested at any time for any date, period or year. These reports are not automatically captured

The following reports are automatically saved in excel format when the month is closed, They are saved in the attachments tab in the End of the Month Closing and Journals menu.

  • Accounts Receivable Aging Report: This is a listing of all customer outstanding balances and is represented by a debit balance in the corresponding G/L account.
    • Report is produced in detail format and sorted by branch.
    • The “Invoice Balance” should agree to the Accounts Receivable G/L debit balance.
    • Available on Accounting > Accounts Receivable > Aging Report in detail or summary.
  • Accounts Payable Aging Report: This is a listing of all vendor outstanding balances and is represented by a credit balance in the corresponding G/L account.
    • Report is produced in detail format and sorted by branch.
    • The “Invoice Balance” should agree to the Accounts Payable G/L credit balance.
    • Available on Accounting > Accounts Payable > Aging Report in detail or summary.
  • Inventory Value by Warehouse Report: This is a listing of all “on hand” items with quantity, cost and overall value. The report may be captured for a single warehouse or all warehouses.
    • Each warehouse’s total physical value should agree to the debit balance in the corresponding inventory G/L account.
    • Report is produced in detail format and sorted by product line and warehouse.
    • Consumable items are excluded.
    • Available on Inventory > Inventory Value Report in detail or summary.
    • Negative quantity items are included.
  • Uninvoiced PO Report: This is a listing of all received purchase orders for which the vendor’s invoice has not yet been entered.
    • Report is produced in summary format with one line per uninvoiced purchase order.
    • The report value represents the difference between “physical” and “G/L” inventory. There is an option to accrue the value of uninvoiced PO’s as an automatic journal entry, thereby eliminating the uninvoiced PO value from consideration in the inventory reconciliation. The entry posts at the time of the A/P close.
    • Available on Purchasing > uninvoiced PO Report.
  • Warranty Tag Journal: This is a listing of all items that have been returned on sales orders and tagged for an impending claim.
    • The report value should match the debit balance in the Warranty Pending G/L account.
    • Available on Inventory > Warranty > Warranty Tag Report.
  • Warranty Claim Journal: This is a listing of all pending warranty claims made to vendors.
    • The report value should match the debit balance in the Warranty Receivable G/L account. Available on Inventory > Warranty > Warranty Claim Report.
  • P.O.S. Open Deposit Report: This is a listing of all deposits (pre-payments) received for undelivered merchandise. During the time between receipt of the deposit and delivery of the product, the deposit is a liability.
    • The report value should match the credit balance in the POS Deposits G/L account.
    • Available on Sales > Order > P.O.S. Open Deposit Report.

Special considerations for accounts receivable

  • For users of a Consolidated A/R and A/P Close: An accrual journal entry for uninvoiced purchase order value is posted to the closed period followed by a reversal in the next period.
  • For users of Job Stream: Closing the A/R module calculates finance charges (if applicable) and generates customer statements.
  • For users of Divisions: Closing the A/R module consolidates the stock transfers and generates Division Billing customer invoices. The A/R module must be closed prior to A/P for divisional systems and it is recommended to set the consolidated close to avoid closing out of order.

Special considerations for accounts payable

  • If you are using recurring accounts payable: Closing the A/P module generates recurring accounts payable invoices for the new period.
  • If you are using version 17 and later: The automatic accrual of uninvoiced Purchase Orders will be posted to the period being closed, followed by a reversal in the next period. For more information, please refer to Inform Version 17 Inventory Posting &Reconciliation.
  • If you are using divisions: Closing the A/P module generates Division Billing vendor invoices. The A/R module must be closed prior to A/P for divisional systems and it is recommended that the consolidated close option is used to avoid closing out of order. For more information about divisions, please refer Using Branches and Divisions.

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