General Ledger Month End Closing

Video Library Video Course Library General Ledger Month End Closing

 

This training outlines the procedures for performing the General Ledger End of Month (GLEOM) closing in the FLEX system. The GLEOM process is essential for closing the current “LIVE” general ledger period and moving pending transactions into the new “LIVE” period.

I. Overview

  • The GLEOM must be performed monthly.
  • It can be performed immediately after a member month-end or any time thereafter, up until the next member month-end processing.
  • FLEX recommends closing a few days before the member month-end to allow time for issue resolution.

II. Pre-Closing Steps

Before running the GLEOM program, ensure the following steps are completed:

  • Post Accruing Entries:
    • If not configured for auto-accrual (auto interface), manually post accruing entries (e.g., interest on loans or dividends).
  • User Exit from General Ledger Menu:
    • All users must exit the General Ledger menu option to ensure necessary files are available for backup.
    • Tellers can still perform normal functions in Transaction Entry/Inquiry.
  • Run General Ledger Reports:
    • Run general ledger reports to determine the closing entry amount to be manually posted, if the period is a closing frequency.
    • Refer to the “Maintaining General Ledger Closing Frequency” section if unsure of the closing period.

III. Maintaining General Ledger Closing Frequency

To verify or change the GL Closing Frequency and Profit or Loss GL Number:

  1. Access General Ledger:
    • From the FLEX Main Menu, navigate to GL / Accounting > General Ledger.
  2. Select Company Maintenance:
    • From the Maintenance drop-down menu, select Company Maintenance.
  3. Verify/Change Settings:
    • Verify or change the GL Closing Frequency. Valid frequencies are:
      • Monthly
      • Quarterly
      • Semi-Annually
      • Annually
    • Verify or change the Profit or Loss GL Number.
    • Note: The frequency settings here dictate when closing entries (zeroing out Income and Expense general ledgers) will be posted. The General Ledger Closing itself is always run monthly to move transactions from Pending to Live.

IV. General Ledger Reports (Financials)

FLEX provides several reports to aid in the General Ledger Closing process, including the Trial Balance, Income Statement, and Balance Sheet. These reports can be run at any time.

  • Accessing Reports:
    • All General Ledger reports are found in the FLEX Main Menu under General Ledger Reports.
  • Generating Income Statement and Balance Sheet:
    • Generate these financial statements as many times as needed before closing the general ledger.
    • Crucial: Review both reports before closing to ensure accuracy.
    • Tip: Consider creating a ‘GLEOM’ folder in the FLEX user bar and adding these reports and the general ledger closing options for quick access.
  • Report Generation Settings:
    • For Income Statement and Balance Sheet:
      • Include Pending Transactions: Enter No (if available).
      • Include Todays Transactions: Enter No.
      • This ensures the report reflects only the open period’s data.
  • Branch Settings for Reports:
    • AL: All branches. Creates a separate report for each branch.
    • CO: Consolidate all branches. Excludes the Branch ID and reports all branches combined.
    • 99 (or specific ID): Enter the actual Branch ID number. Creates a report for only the specified branch.

V. Determining the Closing Entry Amount

The last page of the Balance Sheet displays totals used for the closing entry.

  • Profit for the Period:
    • If ‘CR’ is appended to the Undistributed Net Income amount, there is a profit.
    • Closing Entry: DEBIT the Profit & Loss (96000) general ledger and CREDIT the Undivided Earnings (94000) general ledger.
    • Exception: If closing entries are redirected to use 94000 (System Posted Closing Entry), this manual entry is not required.
  • Loss for the Period:
    • If ‘CR’ is not appended to the Undistributed Net Income amount, there has been a loss.
    • Closing Entry: CREDIT the Profit & Loss (96000) general ledger and DEBIT the Undivided Earnings (94000) general ledger.

VI. System Posted Closing Entry

If the credit union is not required to move funds to a reserve general ledger before closing, the system can perform the closing entry automatically.

  1. Access Company Maintenance:
    • From the General Ledger menu option, access Company Maintenance.
  2. Change Profit or Loss GL Number:
    • Change the Profit or Loss GL Number to the Undivided Earnings general ledger number (e.g., 94000).
    • FLEX will then zero out the Expense and Income accounts and offset the entry to Undivided Earnings (94000) when the general ledger is closed, based on the GL Closing Frequency setting.

VII. Manual Closing Entry

A manual closing entry is required when the general ledger closing falls on the credit union’s defined frequency (e.g., monthly if configured for monthly closing).

  • Prior to Final Closing Entry:
    • Run the general ledger Balance Sheet to obtain the most recent totals. Journal entries posted later in the day could affect the manual closing entry.
    • If a closing entry was posted earlier and other journal entries have occurred, run a new Balance Sheet (flagging ‘Today’s’ and ‘Pending Transactions’ as ‘N’) and post another closing entry before running the general ledger closing program.
  • Calculating Remaining Closing Entry Amount:
    • Take the Undistributed Net Income Total from the bottom of the report.
    • Deduct the Net Income total.
    • The difference is the remaining closing entry amount.
  • Branch Accounting Considerations:
    • If branch accounting is used, the entry may need to be split between affected branches.
    • To determine if posting to all branches, access Company Maintenance from the General Ledger menu.
    • If posting to ALL branches, run the Balance Sheet using branch code ‘AL’ to break down totals per branch.
  • Typical Closing Entry:
    • A typical closing entry occurs between the Profit & Loss (96000) general ledger and the Undivided Earnings (94000) general ledger.
    • After the period is closed, the Net Income, Undistributed Net Income, and Expense general ledgers will reflect a zero balance.

VIII. Complete General Ledger Close

The Complete General Ledger Close program must be run each month, regardless of the configured closing frequency. The closing entry itself is posted based on the credit union’s designated frequency.

  1. Access Program:
    • From the FLEX Main Menu, navigate to System Administration > Scripted End Of Periods > Complete General Ledger Close.
  2. Confirmation and Date Entry:
    • The screen will prompt for confirmation and the End of Period date.
    • Type YES and press ENTER to continue.
    • Enter the true End of Month date (e.g., 03/31/20 for March 2020). Entering a non-month end date (e.g., 3/28/20) will cause the closing to run but not zero out correctly.
  3. Submit Job:
    • Hit Enter to submit the job.
    • The closing process typically takes less than 20 minutes, varying by data volume and server speed.
  4. Report Availability:
    • When finished, reports will display in the General Ledger (EGL) section of Document Manager.
    • Reports are also accessible via the GL EOM shortcut button within Document Manager.
    • Note: After closing, the option to ‘Include Pending Transactions’ will not be available when accessing the General Ledger, as there is no longer a pending period.

IX. Verifying General Ledger Close Completion

Several items can be checked to ensure the program has finished successfully:

  • Reports:
    • Multiple copies of each report (pre-closing and post-closing versions) will be present in the General Ledger report group of Document Manager.
  • End of Job Log:
    • This is the last report to generate. If it is not present, contact FLEX Back Office Support.
  • Pending File:
    • When accessing the General Ledger from the FLEX Main Menu, the ‘Pending Transactions’ checkbox will no longer be available, as the Pending File has been moved to Live.
    • The Pending File will become available again after the next member Month End completes.
  • ALM Downloads:
    • If using ALM downloads (e.g., Sendero or Minerva), files must be built after the General Ledger Close is complete to ensure data integrity.

X. Quick Steps Summary

  1. Post accruing entries if not configured for auto-accrual.
  2. Ensure all users exit the General Ledger menu option.
  3. Run general ledger reports to determine the manual closing entry amount (if applicable).
  4. Run the Complete General Ledger Close program (accessed under System Administration > Scripted End of Periods in the FLEX Main Menu).

XI. Common Issues When Closing the General Ledger

  • ‘WARNING: The GL is out of balance. Continue?’
    • Cause: The General Ledger is out of balance.
    • Resolution:
      • Run an Open Trial Balance and a Pending Trial Balance.
      • If the Open (LIVE) Trial Balance is out of balance, correct the outage.
      • If the Trial Balance shows an outage only when pending is included, the closing may still be performed. The user can choose to close the general ledger even if out of balance.
  • ‘GLTRAN has dates in the future of current open period’
    • Cause: A batch posting or individual postings have been dated for an incorrect period (e.g., Accounts Payable or Investment postings dated for the pending file but posted to the live files).
    • Resolution: Contact FLEX Back Office Support immediately if this message is received.