Managing Technical Steps During the Period-End Closing Activities

Objectives

After completing this lesson, you will be able to:
  • Explain technical, organizational, and documentary closing activities
  • Execute the balance carryforward program
  • Open and close posting periods

Technical, Organizational, and Documentary Closing Activities

Flowchart shows steps at fiscal year start: legal processes on left like currency valuation, accruals; technical actions on right like carrying balance forward, managing G/L accounts.

At the end of the fiscal year, the ledger balances must be carried forward and the ledgers must be closed.

General Ledger Closing

The operations during general ledger closing are as follows:

  1. At the beginning of the fiscal year, the balance carryforward program is run, which carries forward the balances of the general ledger, customers, vendors, and asset accounts to the next fiscal year.
  2. The posting periods of the old fiscal year are blocked and the special periods for closing postings are opened.
  3. The foreign currency documents are valuated, the accruals are performed, and the Goods Receipt and Invoice Receipt (GR/IR) clearing accounts are analyzed, including regrouping of the balance.
  4. Once complete, the special periods can be closed.
  5. For documentation purposes, the balance audit trail is then executed and the financial statement created.
  6. Messages are created for statutory reporting.

Note

The closing process may vary from country to country. Your trainer can provide you with information on the special procedures that may be required in your country.

Balance Carryforward

Diagram showing G/L accounts balance carry forward. Balance sheet accounts with CB 120 and 100 are transferred to new fiscal year. P&L account closing balance 20 goes to retained earnings.

The balance carryforward is executed as follows:

  • Balance sheet accounts and customer and vendor accounts:

    The balances on the balance sheet accounts are simply carried forward into the new fiscal year. With the default setting, all account assignments are transferred. When the system performs balance carryforward for the G/L accounts of the leading ledger, it automatically performs balance carryforward for the vendor and customer accounts as well. However, you can also perform balance carryforward separately for the vendor and customer accounts (Program SAPF010).

  • Profit and loss accounts:

    P&L statement accounts are carried forward to retained earnings accounts. You define the retained earning account(s) in Customizing under Financial Accounting→General Ledger Accounting→Master Data→G/L Accounts→Preparations→Define Retained Earnings Account.

  • Fixed asset accounts:

    The system carries all general ledger-relevant values and statistical fixed asset values forward with the balance carryforward. The system writes values carried forward on accounts and ledger level for each fixed asset. The fixed asset accounts are carried forward to the same accounts. The balance carryforward must be executed for all representative ledgers.

    The balance carryforward program can only perform the balance carryforward in Asset Accounting automatically when this was successfully performed in G/L accounting. In order to determine the planned depreciation values for the depreciation run, the system automatically triggers a recalculation of values for all fixed assets in the new year. If errors occurred, you should start the recalculation again manually.

How to Execute the Balance Carryforward Program FAGLGVTR

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Posting Periods

Financial graphic showing invoice posting details. The invoice totals 1,100, dated 03/25/YYYY. It updates customer account balances for period 03 within fiscal year YYYY, affecting posting periods 03 to 04.

The system uses the posting date that you specify during document entry to determine to which posting period the document is posted. The posting periods for your company are defined by the fiscal year variant.

Fiscal Year Variant: System Settings

You can use the fiscal year variant to make the following system settings:​

  • Beginning and end of the fiscal year.
  • Number of normal posting periods (01–16).
  • Number of special periods (the remaining periods up to 16 after normal periods have been selected).
  • Posting period length.

Note

As a general rule, fiscal year must be closed for all the Subledgers (including FI-AA) before closing the fiscal year in FI-G/L. This is one of the main Accounting Principles, and must always be known by users before proceeding to the fiscal year closure, as this incorrect handling can lead to serious inconsistencies in the G/L balance.

Posting Period Control

Three blue circles labeled Interval 1, 2, and 3. Intervals 1 and 2 show numbers 1-12 clockwise; Interval 1 adds numbers 13-16. Interval 3 labeled CO shows numbers 3-12 with missing segments 1 and 2.

The posting period tables are used to open and close posting periods. You can have as many posting periods open as you want.

The first column illustrates the posting period variant. This code is assigned to your company codes list and allows you to open and close the posting periods for several companies at the same time. The next column contains the account type. This column allows you to control the open posting periods by account type.

Codes for Account Types

The codes for the various account types are as follows:

  • + for all accounts
  • A for assets
  • D for customer accounts
  • K for vendor accounts
  • S for general ledger accounts
  • M for material accounts
  • V for contract accounts

Accounts are open for the periods specified in the table and closed for periods not specified.

The line with account type + (valid for all accounts) determines the maximum length of the open periods for an account type.

In the additional lines with the individual account types (A, D, and so on), the number of open periods for the accounts specified is restricted.

In SAP S/4HANA period interval 3 is used for postings from Controlling (CO) to Financial Accounting (FI). If this third interval is not filled, the entries in intervals 1 and 2 are also valid for these postings. In SAP S/4HANA postings in FI (CO-relevant) and postings in CO (FI-relevant) need open periods in FI (transaction FAGL_EHP4_T001B_COFI) and the CO period lock (transaction OKP1).

How to Open or Close Posting Periods

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