Efficient Month-End Documentation = Efficient Year-End Audit 4/14/2018 3:00 AM Efficient Month-End Documentation = Efficient Year-End Audit Barbara Gavron, CPA | S2 Technology Bob McAdam | Dynamic Communities © 2016 Dynamic Communities. All rights reserved. DYNAMIC COMMUNITIES MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Session Objective To provide a guideline for performing and documenting standard month-end procedures. This documentation will become the backbone for your yearend audit and reduce the time spent at yearend gathering information for your auditors.

About Barbara Dynamics GP user for 3 years before becoming a GP Consultant Implemented GP twice as a client GP Consultant for 11 years Certified in Dynamics GP at last year’s GPUG Summit Instrumental in starting North FL GPUG Chapter (Jax) Originally from Long Island, NY but has lived in Jacksonville for 33 years BS Degree in Accounting and current CPA in FL

What about Bob? Dynamics GP implementer & business development resource with two large partners for 13+ years Migrated from accounting gigs to Dynamics GP consulting in Jan 1998 (v4.0 then) Active w/ GPUG & GPUG Academy since inception (2007 & 2008, respectively) Former GP customer/end user at www.trucks.com Microsoft Certified Trainer (circa 2004) Inaugural GPUG ‘All-Star Award’ recipient (Nov 2011) Inaugural ‘Richard Whaley Academy Award’ recipient (Oct 2014) Dynamics World (UK) ‘Top 100 Most Influential in Microsoft Dynamics’ (May 2012 and May 2013) Dynamics GP Exam Certification Committee at www.dynamicspro.org Co-Host of ‘Enterprise Software Podcast’ www.enterprisesoftwarepodcast.com

Recommended EOM Procedures

Ensure all transactions for the month have been entered and posted Ensure all transactions for the month have been entered and posted. Review and record recurring journal entries Accruals Amortization Depreciation Post all batches Routines>>Master Posting OR you can go series-by-series using Series Post

Compare AP GL to AP sub-ledger Compare EOM G/L acct balance for AP control account to the total of the AP Trial Balance as of the EOM date. Print both, staple together and put in EOM packet. Step 1) Inquiry>>Financial>>Summary (Print this) Step 2) Reports>>Purchasing>>Trial balance then select Historical Aged TB from the drop down. Then select the Option you want to run. You may need to modify the Option to make sure you are using the correct EOM date. Print the report. Circle the total on each document to show that you have matched the balances.

Compare AR GL to AR sub-ledger Compare EOM G/L acct balance for AR control account to the total of the AR Trial Balance as of the EOM date. Print both, staple together and put in EOM packet. Step 1) Inquiry>>Financial>>Summary (Print this) Step 2) Reports>>Sales>>Trial balance then select Historical Aged TB from the drop down. Then select the Option you want to run. You may need to modify the Option to make sure you are using the correct EOM date. Print report. Circle the total on each document to show that you’ve matched the balances.

EOM Inventory procedures Compare EOM G/L acct balance(s) against Historical Stock Status as of the EOM date. Print & place in EOM packet. Step 1) Inquiry>>Financial>>Summary (for each Invty acct) Step 2) Reports>>Inventory>>Activity then select Historical Stock Status from the drop down. Then create/select the Option you want to run (‘by Site’ is an available attribute). You may need to modify the Option to make sure you are using the correct EOM date. Print report. Circle the total on each document to show that you’ve matched the balances. Doing Stock Counts? Setup / Schedule / Entry windows Supports multiple bins, too

Fixed Assets Management Record additions and disposals Post Run Depreciation Financial>Routines>Fixed Assets>Depreciate Closing at Year-End

Cash/Checkbooks Ensure GL balance for each Checkbook equals the Checkbook balance. Financial>Cards>Checkbook Print each Checkbook and place in the EOM book. Reconcile Checkbook to Bank Statement. Financial>Transactions>Financial>Reconcile Bank Statement Print Reconciliation Journal, Adjustments, Marked Transactions and Outstanding Items list and place in the EOM book.

Maintain Fiscal Periods Once financials have been reported for a month, close the fiscal period to prevent further entries from being posted. A rolling 3-month set of open periods is recommended. As soon as you close one month, open up the next month in line. Is your Fiscal Periods window available via your toolbar?

Documentation Recommendation We recommend that a 3-ring, month-end binder be kept that evidences that the minimum EOM procedures were followed, as well as keeps documentation relevant to that month's activity. The format is based loosely on how audit workpapers are set up and, if kept accurately, should be very helpful to your auditors during your annual Financial Statement audit. Feel free to modify the format to meet your needs. There should be one binder for each fiscal period, with each section labeled and the documentation neatly organized. Theoretically, the period 12 binder will contain most of what your auditors will ask for during the audit, although the monthly binders will be of interest to them as they will want to examine those documents as well.

MD&A Management Discussion and Analysis - a narrative prepared for the BOD, Upper Management and / or investors that gives an overview of the monthly financial position, the results of operations and a comparison of the results against the budget, the prior month period and the prior year. In addition, this narrative may contain information about current events and happenings that have an effect of the financial positions.

Financial Statements Balance Sheet Income Statement Cash Flow FRx Management Reporter Jet Express for Excel Other 3rd parties

Journal Entries The JE records for any entry that is considered unusual or might raise questions at a later date. Include the supporting documentation for these entries. It is not necessary to include all JE posting reports in this section.

Cash A copy of the bank reconciliation and the bank statement, as well as a printout of the Checkbook window in GP. This is evidence that the checkbook was reconciled to the bank statement as well as to the balance of the GL account that is considered the control account for each checkbook.

Accounts Receivable A copy of the Open Aged AR report and the GL Summary for the control account that represents this TB. NOTE: While it is recommended that you include a detailed report of O/S AR items, if it is voluminous you can just include a printout of the last page of the report showing the totals.

Prepaid Assets Copies of invoices where a new prepaid asset was set up for this period, plus a list of the current unamortized balance of each individual prepaid item contained in the account(s). A copy of the GL Summary for this account(s) is also recommended as this is evidence that the spreadsheet detail matches the total of the account.

Deposits Any evidence that backs up any additions to the Deposits account - i.e. check copy and/or invoice paid.

Fixed Assets Copies of invoices paid in this period that represent additions to Fixed Assets and any evidence supporting any disposals of assets (including copies of checks received as proceeds for the disposal). NOTE: It is helpful to mark the top right corner of the invoice with the Asset ID assigned to this item.

Accounts Payable A copy of the Open Aged AP report and the GL Summary for the control account that represents this TB. NOTE: While it is recommended that you include a detailed report of O/S AP items, if it is voluminous you can just include a printout of the last page of the report showing the totals.

Accrued Expenses A detail list of what makes up this(these) account(s).

Capital Any evidence supporting changes in the Capital structure of the business (except for the P&L effect to Retained Earnings).

Month-end Checklist Include an EOM checklist, showing the procedures that you followed at month end. It would indicate each step and have a place where the employee who performs it can initial and date it.

Sample Month-end Checklist Month Ended: 4/30/2017 Done By   Initials Date 1 Post Recurring Batches (change amounts, if necessary): AP: 1RECUR GL: 1RECUR EOM1 GL: 1RECUR EOM2 2 Enter/Post all Sales batches 3 Enter/Post all Inventory Receipts 4 Enter/Post all AP Invoices 5 Enter/Post all Inventory Adjustments 6 Perform Fixed Asset transactions (Add, Disposal) 7 Run Fixed Asset Depreciation 8 Post Fixed Asset to GL 9 Post Commissions JE 10 Check for any unposted batches (Microsoft Dynamics GP>Tools>Routines>Master Posting). **It is OK to have recurring batches in here as long as they are posted up through the current month end period. 11 Delete any batches that have no transactions in them. You will have to go to that module and select the individual batch and then click Delete. 12 Reconcile the Bank Statement to the Checkbook 13 Compare the Checkbook Balance to the GL Balance for that GL account. This can be seen on the Checkbook Card (Financial>Cards>Checkbook. In upper right corner. Print this page and keep with your bank reconciliation paperwork. 14 Compare AP Historical Aged TB as of month end date to the GL account 2800-00. 15 Compare AR Historical Aged TB as of month end date to the GL account 1200-00. 16 Print Management Reporter reports: BS, IS and Dept Expenses 17 Maintain Fiscal Periods. Microsoft Dynamics GP>Tools>Set up>Company>Fiscal Periods. Put a check mark in each module for each period that you no longer want users to post to. 18 Put together the EOM three ring binder.

4/14/2018 3:00 AM Questions? Don’t forget your surveys! Barbara Gavron, CPA | bgavron@s2technology.com Bob McAdam | bob.mcadam@dynamiccommunities.com © 2016 Dynamic Communities. All rights reserved. DYNAMIC COMMUNITIES MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

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