2010 Dynamics SL Year End Event December 15, 2010

Top 5 Year End Support Questions Where do we get year end updates? Log into CustomerSource www.microsoft.com/customersource/downloads/servicepacks/sl10yearend.htm Tax updates not out yet for Payroll Tables Usually last week of December they are issued. Load them AFTER closing payroll for the year. Can’t print AP checks with a check date of 2011? Error 532 Date must be in an open 1099 calendar year when printing checks. Go to AP, Processes, Close 1099 Year Can only have two 1099 calendar years’ worth of data Can I close just the GL period instead of closing year? No, must close year the period option will not work. You can post back to any period or year. My 1099 balances are wrong, how can I fix them? Log into SL with a user that has initialize rights for vendor maintenance. Turn initialize mode on, go to AP, Vendor Maintenance, 1099 tab will now have numbers that are black and you can change them. Closed payroll and now I need to do a check for 2010, can I do that? Yes, when you run calculation in payroll just make sure you use a check date that is in the calendar year 2010. W2’s are based on check dates of checks.

Introduction to Closing Year End vs. Monthly Except for Tax reporting in AP an PR there technically is no difference Year vs. Period In Reality there is a difference Accuracy of Standing Accruals Budget Fulfillment Covenant Reporting Performance Reporting Tax implications Etc. However, Remember we don’t have to worry about not being able to post back or forward in all modules Why do we have closings It is used to help us measure how we (as a company) are performing It is a Snap Shot of our financial position at one point in time What are the biggest problems at closing Timing/Cut-off Reconciliations

Timing/Cut-off It should allow for reports to be published quick enough for Management to react to the information before the next period close. Planning for Year-End What can be done ahead of time With an integrated system like SL we recommend closing as close to Work Day 1 as possible Easier to Coordinate consistency between modules Minimize problems with Cash Manager Most important, It should be consistent period after period including Year End.

Reconciliations Reconcile the Sub-Ledgers to the General Ledger AR, AP, Inventory, Cash Manager, Payroll, etc. For Problem Sub-Ledgers consider reconciling on an interim basis Make sure the Sub-Ledger is correct i.e. that there are no problems within the Sub-Ledger Make sure there are no Unprocessed batches Don’t delay in releasing or posting batches

General Ledger The GL should be the last module you close for the Period or Year Enter all Standard JE’s and adjusting JE’s Generate Recurring JE’s Ensure all sub-modules have been reconciled to the GL Analyze all transactions in Suspense accounts. Correct and post Verify all GL batches have been released and posted Review Batch Register in Summary Format Field = batch. Status; Operator = IN; Value = B,H,S,U Verify all Allocations have been generated and posted Run Trial Balance Assets = Liabilities Current Year Income = Profit & Loss Statement Run Financial Statements (look at key #’s such as Revenue, GP, specific accts)

Accounts Payable If you are using the Inventory module and the Purchasing module then you need to coordinate AP closing with Inventory Ensure all available Supplier’s invoices have been entered Verify recurring batches have been generated and posted Verify all batches have been released and posted Review Batch Register in Summary Format Field = batch. Status; Operator = IN; Value = B,H,S,U,K and R Verify Vendor Trial Balance agrees with Vendor Aged Report Verify Vendor Trial Balance agrees with the General Ledger Trial Balance. If not then: Was a reconciliation completed last period Run a Detail GL for the AP account(s) and look for transactions that did not originate in AP (or PR if Deductions are set up by Vendor) Run the AP Account Distribution Report by Transaction Type. Look for documents that were debited and credited to the AP account.

Accounts Payable Other Items related to Accounts Payable Processing 1099’s 1099 forms are updated based on check dates – not period-to post 1099 Calendar Year Control (Allows for two active 1099 years) Date must be in an open 1099 year when printing AP Checks You should purge the Oldest year only after you have completed the final printing of 1099 forms Year End Updates for 2010 are available now for download SL 7.0 all versions SL 6.5 sp2 & sp3 No changes to the form Few updates to the 1099 Electronic file

Accounts Payable Other Items related to Accounts Payable (Continued) Processing 1099’s (Continued) How do we know they are correct Quick & Dirty Check Compare Payments in Vendor History Report (03.671.00) to 1099 Preview (03.730.00) Select field = Vend1099 ; Operator is equal; Value = ‘1’ If on a fiscal year, you may have to use MS Query Detail Check Down load KB936577.zip file from Boyer Website Report for all paid documents to 1099 Vendors regardless if a 1099 box was used Note : Pay special attention to Prepayments and Adjusting Debits Causes for Incorrect 1099’s Vendor was not originally set up as a 1099 Vendor Vouchers entered to an incorrect 1099 Box

Accounts Payable Other Items related to Accounts Payable Processing 1099’s (Continued) How do we Correct 1099’s 1099 amounts can be manually corrected using Initialize Mode in the Vendor Maintenance screen. Can try running the rebuild 1099 history option in the AP Integrity check PSTL tool to assist in rebuilding 1099 information for paid vouchers that were not originally entered as 1099 vouchers. $ 750.00. Filing Electronically If more than 250 1099’s you must file electronically to the IRS If more than 25 1099’s you must file electronically to the State of MN See Fact Sheet 2a from MN Dept of Revenue

Accounts Receivable If you are using Order Management and Inventory then the AR module should be closed at the same time as Accounts Payable. There is an exception to this rule. If you are also using Flexible Billings, then AR will need to stay open until the Project Billing review process has been complete. If using Order Management, ensure all shipments made prior to month end have been invoiced and processed thru the Sales Journal to AR ‘Invoice/Memo’ screen Ensure all activity such as Payments, Invoices, CM’s & DM’s that relate to activity completed in the prior period have been entered into the AR Module Verify all Recurring Invoices have been generated and posted for the period Verify all batches have bee released and posted Batch Register in Summary Format Field = batch. Status; Operator = IN; Value = B,H,S,U Verify Customer Trial Balance agrees with the AR Aging Report

Accounts Receivable (Continued) Verify the Customer Trial Balance agrees to the General Ledger Trial Balance. If not then: Was a reconciliation completed last period Run a Detail GL for the AR account(s) and look for transactions that did not originate in AR Run the AR Account Distribution Report by Transaction Type. Look for documents that were debited and credited to the AR account.

Inventory If you are using Order Management and Purchasing then the closing of the Inventory module must be coordinated with the closing of the AR module and the AP module. Ensure all items that have physically been received are recorded as receipts either thru the Inventory Receipts screen or the Purchasing ‘Receipt/Invoice’ screen Ensure all items that have been physically shipped are recorded as issues into Inventory and as Invoices in the AR ‘Invoice/Memo’ screen Verify all batches have been released and posted Batch Register in Summary Format Field = batch. Status; Operator = IN; Value = B,H,S,U Post all transactions to the General Ledger

Inventory (Continued) Compare the Inventory Valuation Report to the Inventory Trial Balance Run GL Transaction report in ‘Unposted’ format with an ending period in a future period. Note all transactions with a Journal Type of IN, PO, OM. These will have affected the Valuation Report an not the Trial Balance Run the ‘Inventory Trial Balance/Valuation Variance’ report . Analyze any item that shows up on this report. Compare the Inventory Trial Balance report to the General Ledger Trial Balance. If not then: Verify the Inventory Trial Balance was reconciled to the General Ledger Trial Balance at the end of the last period. Run the Detail GL report an review transactions which affected the Inventory account(s) that do not have a Journal Type of IN, OM or PO

Cash Manager The Cash Manager is both Date sensitive and Period Sensitive. It is date sensitive when updating the Cash Manager It is period sensitive when updating the General Ledger The Reconciliation function is two fold A reconciliation between the Bank Statement and the Cash Manager A reconciliation between the Cash Manager and the General Ledger We recommend that you disassociate the ‘Cash Manager to the General Ledger reconciliation’ in the Bank Reconciliation screen and perform two separate reconciliations Cash Manager to the General Ledger Bank Statement to the Cash Manager

Cash Manager (Continued) Reconcile the Cash Manager to the General Ledger Verify all batches have been released and posted. This includes the batches from CA, GL, AP, AR and PR Verify all Recurring Items have been generated and posted Balance the General Ledger Balance to the Daily Cash Balance. If not then: Verify the reconciliation was completed at the end of the last period Review the GL Transaction report in ‘Unposted’ format. Include future periods Review the Detail GL for transactions that do not have a Journal Type of GL, AP, AR, PR or CA. Also look for transactions that do have a transaction type of IN,CM,DM,VO,AD,AC, etc. Make required adjustment. (Note: this may require an OA,OD,OP or OM transaction. (i.e. adjustments to CM but not the GL)

Cash Manager (Continued) Reconcile the Bank Statement to the Cash Manager. If not then Verify the beginning balance on the Bank Statement agrees Statement Balance on the last Bank Reconciliation Record any transaction on the Bank Statement that is not in SL Run the Bank Reconciliation report. This may list differences that might assist you in reconciling the bank statement Extract Cleared Deposits and Cleared Checks to Excel Compare to the summary information on the Bank Statement to isolate the difference

Payroll The Payroll module must be closed for the Year-End in the accounting period that contains the 12/31/XX date. (i.e. where the check date is on or before 12/31/XX and after the last Pay Period. When you close the Payroll module for the Year it creates new deduction records for the next year based on the deduction records for the current year. Therefore, the 2011 payroll calculation will not work until the year end close for Payroll has been completed in 2010. The preferred method for Month-End and Quarter-End Payroll closing is before the accounting period ending date. However, it is not a requirement. Consider a bi-weekly payroll which has 26 Pay periods in an Accounting System with 12 Periods. You will either have to accrue or reverse a portion of the expenses to match the Payroll expense in the right period

Payroll (Continued) Month-End Procedures Verify all Payroll Batches have been released and posted Batch Register in Summary Format Field = batch. Status; Operator = IN; Value = B.H,K,S,R and U Post all transactions to the General Ledger Reconcile the Payroll module to the General Ledger. If not then Compare the P&L Accounts in the Account Distribution report in summary format with the General Ledger Trial Balance Run the GL Transaction report in Unposted format and include future periods Run the Detail GL report and look for transactions that did not originate in Payroll Verify that last month was reconciled Consider reconciling the “Earnings Deductions’ report in Total Format to the following reports 941 Worksheet Unemployment Worksheets (both Federal and State)

Payroll (Continued) Quarter-End Procedures Same procedures as Month-End procedures Reconcile the “Earnings Deductions’ report in Total Format to the following reports 941 Worksheet Unemployment Worksheets (both Federal and State) Consider testing W-2’s Use the ‘Earnings Deduction’ report in Detail Format

Payroll (Continued) Year-End Procedures Same procedures as Month-End and Quarter-End procedures Verify all calculations for the current year are processed and cleared prior to closing the year. (i.e. there should not be anything in the check preview report) Close the Payroll using the Year Closing Option Install Year-End updates. Note: this can be completed before or after you close Payroll for the year Year End Updates for 2010 are available now for SL 7.0 all versions SL 6.5 sp2 & sp3 Load 2011 Tax update. This must be completed after you close the Payroll for the year. Tax tables will be available later this month.

Payroll (Continued) Year-End Procedures Update deduction and earnings information for employees Such as new SUTA rate, new Insurance rates, etc. Note: Clear Hire Act Check Box on Employee Maintenance Screen.. Assuming it is not extended. Prepare W-2’s

W-2 Processing The W2 calculation process is used to calculate W2’s and can be run at anytime, as well as, multiple times Can be run by pay group and by employee if necessary Can be run for any calendar year that you are retaining detail (i.e. after Payroll has been closed for the year) After the calculation has been processed you can review by running the W2 forms Compare to ‘Earnings Deduction’ report in Detail Format Or, after calculation review in Employee W2 History screen Corrections to W2’s can be made in Employee W2 History screen Must be in Initialize mode If corrections are made (make sure to select ‘Protect Edited W2 Information’ is checked in the W2 calculation screen. This way edited information will not change Corrections to Employee History screen Must be in initialize mode

W-2 Processing (Continued) Run W2’s or prepare W2’s using using W2 Electronic file Electronic filing of W2 data is supported for federal filing only However, Minnesota accepts EFW2 file If more than 250 1099’s you must file electronically to the IRS If more than 25 1099’s you must file electronically to the State of MN See Fact Sheet 2 from MN Dept of Revenue

W-2 Processing (Continued) Tips on W2 Processing Some issues require modifying maintenance screens Missing State Employer ID Deduction Maintenance(History)/W2 Control Missing Federal Employer ID Company Maintenance Incorrect Boxes Deduction or Earnings Some issues require corrections on Employee W2 History screen Incorrect wages reported due to incorrect setup of tax exempt deductions Adjustments for taxable items such as taxable life insurance Use Earnings & Deductions – Total format to balance to W2 information for state wages and state withholding amounts to the forms that are filed with your taxing authority QTD & YTD information on the Earnings & Deduction report and the Unemployment Tax worksheet come from data in the Employee History screen. If an error is found in either report, correct in the Employee History screen

Questions & Comments Questions? Is there anything you expected from the course that we did not cover? Contact information : Bud Brenneman Colleen McCoshen bbrenneman@boyerassoc.com cmccoshen@boyerassoc.com 763-412-4333 763-412-4309