Period Management

and Closing Operations

FI-GL-007
FI-GL-007
October 29 – 30, 2008

LaGOV
Version 2.0

Updated: October 28, 2008

 Ground Rules

 Has everybody signed in?

 Everybody participates – blueprint is not a
spectator sport
 Silence means agreement
 Focus is key – please turn off cell phones and
close laptops
 Challenge existing processes and mindsets
 Offer suggestions and ideas
 Think Enterprise
 Ask questions at any time
 One person at a time please
 Timeliness – returning from break
 Creativity, cooperation, and compromise

2
 Project Organization - Functional Teams

Finance Leads Logistics Leads Linear Assets Leads

Beverly Hodges – Finance Lead Belinda Rogers – Logistics Lead Mark Suarez – Agile Assets Lead
Drew Thigpen – Finance Lead Jack Ladhur – Logistics Lead Charles Pilson – Consulting Lead
Mary Ramsrud – Consulting Lead Brad Denham – Consulting Lead
Pat Cane
Babs Myers
General Ledger Mary Ramsrud
Accounts Payable
Accts Receivable
Cash Management
Cost Accounting
Funds Management
Grants Mgt
Project Systems
Asset Accounting

Budget Prep
Grantor
Real Estate Management

3
 GL Workshops

Title Business Process Work Session Date

FI-GL-001 Enterprise Structure July 29

Finance Account Code – Chart of

FI-GL-002/004 July 31
Accounts and data maintenance
Chart of Accounts – GL accounts and
FI-GL-003 August 20-21
master data
Splitting Rules – supporting balance
FI-GL-005 October 2
sheet reporting

FI-GL-006 GL Processing October 8-9

Period Management and Closing

FI-GL-007 October 29-30
Operations

FI-GL-008 Financial Reporting November 5-6

FI-GL-Validation Review of GL decisions December 16-17

4
 Work Session Objectives

 Month end closing process discussion

 Year end closing process discussion
 Period control with determination of special periods
 Cross module and team integration touchpoints
 GL conversion strategy

5
 Process Overview
 OSRAP prepares:
• Close work plan – internal OSRAP task list
• Close procedures – memo to all agencies
• Close time frame document – for OSRAP, OIS, OPB, OSUP,
and OST use

 OIS prepares:
• Close calendar – first draft used by internal OIS teams, final
draft used by OIS and OSRAP

 OSRAP and OIS communicate while all calendars and documents

are being prepared

 OSRAP approves dates, system hours of availability, security

access and lockouts

6
 As-Is Process

 OIS Calendars
• June 30 Close
• 13th Period Close
• Annual Close

 OSRAP Documents
• Close Work Plan
• Close Procedures
• Close Timeline

7
 Process Improvement Opportunities

 Simplify closing processes

 Eliminate reporting complexities
 Period Management and Closing Operations

• The closing of a period is performed in three

sets of steps: pre-closing, managerial closing,
and financial closing.

 Pre-Close activities ensure that all necessary

entries have been posted in the General Ledger
(G/L), including entries from feeder systems/sub
ledgers and accruals and recurring entries
posted directly to the G/L. Pre-close activities
occur in both the old and new months.

 Managerial Close activities involve the re-

assignment of costs throughout the entire
organization, using the allocation and
settlement functionality provided within
Controlling

 Financial Close activities include final

adjustments to valuations and balances prior to
the final close and preparation of reports.

9
 Period Management and Closing Operations

 To separate business transactions into different periods, a fiscal

year with posting periods has to be defined. The fiscal year is
defined as a variant which is assigned to the company code.
 The fiscal year variant contains the definition of posting periods
and special periods . Special periods are used for postings which
are not assigned to time periods, but to the process of year-end
closing. In total,16 periods can be used.
 The system derives the posting period from the posting date. When
the posting date falls within the last normal posting period, the
transaction may be posted into one of the special periods.
 Example: Above you see a fiscal year with 12 posting periods and
4 special periods. If the posting date falls in the 12th period, the
transaction can instead be posted in one of the four special
periods.
 Standard fiscal year variants are already defined in the system and
can be used as templates.
 Note: The fiscal year variant does not include the information as to
whether a period is open or closed; this is maintained in another
table. The fiscal year variant only defines the amount of periods
and their start and finish dates.
10
 Period Management and Closing Operations

POSTING PERIOD

 Posting periods are defined in the fiscal year variant.

 To prevent documents from being posted to a wrong posting period, desired periods
can be closed.
 Usually the current posting period is open and possibly one prior period are open. At
the end of a period it is usually closed and the next period is opened. A period is
opened by entering a range into the posting period variant which encompasses this
period. It is possible to have as many periods open as desired.

11
 SAP Concepts – Special Periods

Use of Special Periods - Example:

 Period 13 - Year-End adjustments prior to draft

statements
 Period 14 - Draft Statements including re-class entries
 Period 15 - Adjustments for audit purposes
 Period 16 - Final statements including audit adjustments

 Special periods need extra care when posting to them

 Access to posting in the special periods should be limited to key
staff

How will we define the special periods?

12
Period Management and Closing Operations

Month-End Closing

January 2
007

13
 Period Management and Closing Operations

 Due to statutory requirements and/or company policies,

the company’s books may be closed and a new period
opened on a monthly basis.
 The typical SAP fiscal closing spans 5-8 days after the
end of the month. A leading practice goal is to eventually
reduce it to 5 days
 The month-end closing process, using SAP transactions,
is provided in the following section.

14
 Period Management and Closing Operations

Month-End Closing Process

Open and Close
Roll
Posting Periods
Material Master
(OB52)
(MMPV)
(OKP1)

Post:
Reconcile:
• Depreciation
• Daily Journal Entries (FB50)
• Grants billing
• Daily Deposits (FB50)
• Salaries
• Weekly Journal Entries
• Accruals/Deferrals
• Bank Charges and Credits (FB50)
• Month-End
•Vendor Checks Issued (FCHR)
Recurring Entries

Create Financial Perform Cost

Statements Center Analysis
(S_ALR_87012284) (S_ALR_87013612)
15
 Period Management and Closing Operations

 You define posting

periods in your fiscal year
Open and Close
Posting Periods
variants. You can open and
(OB52) close these posting periods
for posting. As many periods
as you require can be
open for posting
simultaneously.
 Usually, only the current posting period is open
for posting, all other posting periods are closed.
At the end of this posting period, the period is
closed, and the next posting period is opened.

16
 Period Management and Closing Operations

GL Closing a Posting Period and Opening a New One

Period Range
Special Periods

17
 Period Management and Closing Operations

 You can open and

close CO posting periods
for posting in addition to the
CO Period Lock
(OKP1)
GL period controls. As many
periods as you require can
be open for posting
simultaneously.
 Usually, only the current posting period is open for
posting, all other posting periods are closed. At the end of
this posting period, the period is closed, and the next
posting period is opened.
 CO postings that cross fund, business area, functional
area, or grant are relevant to FI and are affected by the FI
period control as well.

18
 Period Management and Closing Operations

CO Closing a Posting Period and Opening a New One

Typically entire period is locked and unlocked

19
 Period Management and Closing Operations

 Some data (stocks and

Close
certain valuation data such
Material Master as total value, total stock,
(MMPV)
valuation class, price control
indicator, and price unit) is
managed by period.
 For values and goods movements to be posted to
the correct period, the period must be set
whenever a new period starts.

20
 Period Management and Closing Operations
MMPV closes Material Master records
for the old period and opens a new one.
MMRV provides
current status.

21
 Period Management and Closing Operations

This is a single-screen transaction.

Perform adjusting You can enter, hold, park, and post
entries and final
postings documents on one screen.
(FB50)

22
 Period Management and Closing Operations
Reconcile Weekly Journal Entries
• Bank Charges and Credits (FB50)
•Vendor Checks Issued (FCHR)

 Bank Charges and Credits (FB50)

– Use the same transaction used for daily reconciliations.
This transaction is used to post bank charges, credits,
and other miscellaneous charges.
 Vendor Checks Issued (FCHR)
– Use this procedure to reconcile and post vendor
checks that have been issued.
– Perform this procedure when the bank statement
verifies payment to vendor.

23
 Period Management and Closing Operations
Month-End Posting (FB50)
Or relevant integrated
business transaction

– Settlements – perform asset and AuC settlements

– Depreciation – execute depreciation calculation and
posting runs
– Salaries – post final payroll and payroll accrual
– Accruals – the accounts on a balance sheet that
represent liabilities and non-cash-based assets used in
accrual-based accounting. These accounts include
accounts payable, accounts receivable, goodwill, future
tax liability and future interest expense
– Execute Month-End recurring entries
– Grants billing
– Cost allocations

24
 Period Management and Closing Operations

Perform this procedure when you

Create Financial need to determine/report the
Statements results of the balance sheet and
(S_ALR_87012284)
profit and loss statement.
 Balance Sheet
– Invoice-based closing for a group at a specific point in time
(financial statements key date) in the form of a comparison of
assets and capital (liabilities and owner's equity).
– Assets and capital reflect the same total value. This is expressed
in the balance sheet (assets = capital).
 Profit and Loss Statement
– Comparison of revenue and expenditure of a period to determine
the results for the company and the sources of these results.

25
Financial Statements

26
 Period Management and Closing Operations

A cost center is an organizational

Perform Cost unit within a controlling area that
Center Analysis represents a defined location of cost
(S_ALR_87013612)
incurrence.
Use this procedure to display, review, and analyze costs
associated with cost centers.

27
 Period Management and Closing Operations
Month End Schedule (Day 0 to 8)

 Review sample month-end closing calendar

Who will manage the monthly closing calendar?

Who will execute the opening and closing of the financial and MM periods?
Will we reserve for encumbrances as part of the month-end close?
Is 8 days a realistic expectation?

28
Period Management and Closing Operations

Year-End Closing

June 2007

29
 Period Management and Closing Operations

 Due to statutory requirements and/or internal

policies, the State’s books must be closed and a
new period opened on a yearly (annual) basis.
 The June month-end closing process must be
completed prior to performing the year-end
closing process.
 The year-end closing process, using SAP
transactions, is provided in the following section.

30
 Period Management and Closing Operations

Generate Account
Conclude June
Balances for Old
Month-End
Fiscal Year
Closing
(S_ALR_87012277)

Carry Forward Carry Forward Generate Forward

Balance for Balance for Account Balances for
Receivables/Payables G/L Accounts New Fiscal Year
(F.07) (FAGLGVTR) (S_ALR_87012277)

Create Financial Block Old

Statements Financial Year
(S_ALR_87012284) (OB52)

31
 Period Management and Closing Operations

Generate Account
Balances for Old
Fiscal Year
(S_ALR_87012277)

The G/L account balance list shows the following

figures:
 Balance carried forward at the beginning of the fiscal
year
 Total of the period or periods carried forward
 Debit total of the reporting period
 Credit total of the reporting period
 Debit balances or credit balances at the close of the
reporting period (optional)

32
 Period Management and Closing Operations

Carry Forward
Balance for
Receivables/Payables
(F.07)

 This program calculates the balance carried forward for

customers and/or vendors.
 The balances of the previous year are carried forward to
the new year. If the account has not yet been posted in
the new year and no balance carried forward has been
carried out for this account, the account is opened in the
new year with the 1st balance carried forward; otherwise,
the balance carried forward of the account is stored in the
new year if changes result.

33
 Period Management and Closing Operations

Carry Forward Balance for

Receivables/Payables (F.07)

 When posting into a previous year, the system carries

forward the balance automatically. This is independent of
whether the program has already run or not. "posting to a
previous year" means that the posting date of the
document has an earlier year than the entry date.
 This automatic carrying forward also occurs
accumulatively over several years that means a posting in
January 2006 with the posting date December 2004
changes the balance carried forward for 2005 and 2006.

34
 Period Management and Closing Operations

Carry Forward Balance for

Receivables/Payables (F.07)
 The program can be started as often as desired.
 You can post to the new year if the program has not yet
run. When posting, the accounts, however, with a balance
carried forward of greater than zero are opened.
 Postings in the previous year do increase this balance
carried forward, but do not carry forward the total of the
items already posted in the old year to the new year; the
balance carried forward only has the items posted by the
new year into the previous year, but not the items posted
in the previous year itself.

35
 Period Management and Closing Operations

Carry Forward Balance for G/L Accounts

(FAGLGVTR)
Carry Forward
Balance for
G/L Accounts
(FAGLGVTR)

 This process involves carrying forward account balances

into the new fiscal year. The balance to be carried forward
is shown in the account balance display. This program is
used to carry forward the balances of the general ledger
or another ledger to the new fiscal year.
 The program can be run multiple times.
 Normally, the program does not need to be run more than
once, since postings to the previous fiscal year are
automatically carried forward to the current fiscal year, if
the balance carry forward program has already been run.
36
 Period Management and Closing Operations

Carry Forward Balance for G/L Accounts

(FAGLGVTR)
 The transaction is executed as follows:
 Balance Sheet and Customer and Vendor Accounts
– The balances on the balance sheet accounts are simply
carried forward into the new fiscal year.
– Additional account assignments are transferred.
 Profit and Loss Accounts
– Profit and loss accounts are carried forward to retained
earnings accounts. The balances of the profit and loss
accounts are set to 0.
– Additional account assignments are not transferred.
– Retained earnings account(s) have to be maintained
for the P&L accounts and configured.
37
 Period Management and Closing Operations

Generate Forward Account Balances for New FY

(S_ALR_87012277)

Generate Forward
Account Balances for
New Fiscal Year
(S_ALR_87012277)

This is the same transaction as generating forward

account balances for old fiscal year.

38
 Period Management and Closing Operations

Create Financial Statements (S_ALR_87012284)

Create Financial
Statements
(S_ALR_87012284)

 As part of the year-end closing, individual companies

create financial statements according to country-specific
regulations.
 This is the same transaction as creating external reports
discussed in the month-end closing process.

39
 Period Management and Closing Operations

Block Old Financial Year (OB52)

Block Old
Financial Year
(OB52)

 This is the same transaction as opening and

closing posting periods discussed in the month-
end closing process.

40
 Period Management and Closing Operations

Profit and Loss Statement Report

S_PL0_86000028 – this transaction executes the

Profit and Loss statement and provides information
for actual/actual comparisons.

41
 Period Management and Closing Operations
General Ledger Account Balance Report

S_PL0_86000030 – this transaction generates a General

Ledger account balance report.

42
 Period Management and Closing Operations
Year End Closing (High Level)

Year End
Close Month End Year End
Preparation Close Steps Close Steps
Steps

AP, AR, GL – Open special period

FM – Open special period
CO – Open special period
AA – Fiscal Year Change
AA – Year end close steps
MM/FM – Close open items (PR, PO, earmarked funds)
FM – Open period for budgeting
FM – Carry forward commitments and associated budget
FM – Carry forward residual budget
FM – Carry forward Fund balance
AP, AR, GL – Carry Forward balance

43
 Year End Close Calendar:
Conventions and Legend

 Conventions  Module Legend

Step outside of SAP  GL – General Ledger

 AP – Accounts Payable
SAP step  AR – Accounts Receivable
 AA – Asset Accounting
 FM – Funds Management
Month-end process  TR – Treasury
 CO – Controlling
RED
TEXT Question?  MM – Materials Management
 HR – Human Resources

44
 Year-End Closing

 Review sample year-end closing calendar

Who will manage the year-end closing calendar?

How will we define special period authorization groups?

45
 Schedule Manager

Schedule Manager can be used as the central tool to schedule and monitor all
transactions and processes related to the closing process. It provides a good overview of
the status of the closing and contains various means of automating and providing
reminders for tasks. The following main areas will be explored and utilized:
Task List – components available in the task list are used to structure the period closing
process
Workflow (to schedule series of jobs, which need to be run sequentially)
Background jobs
On-line programs or transactions that are executed directly from within Schedule
Manager
Text reminders for non-SAP tasks, e.g. reconcile fund-level cash to investments
and cash on hand
Scheduler - shows tasks that have been completed on a specified day, or where action
needs to be taken. The calendar requires entries to be made for a given day at a certain
time
Monitor - functionality provides:
Detailed job status (spool lists, job log) for a given task
View messages related to given tasks
Work List - better handling of errors. Faulty objects do not go through to the next step,
but are logged for review

46
 Leading Practices

 Perform monthly and annual close

 Develop and communicate comprehensive monthly and
annual closing schedules
 Establish monthly cutoffs to facilitate timely monthly
closings
 Closing should be centrally controlled and managed to
ensure that all steps are completed timely and in
sequence
 Closing schedule includes the closing of all modules and
the closing should be owned by Finance
 All adjusting entries should be posted in the ERP system
 System should provide extended periods for closing
entries
 Identified Risks to a Timely Close

 What specific challenges do we face to ensuring

timely month end and year end closings?

48
 Enterprise Readiness Challenges

 Hard month-end closing processes with

significant centralized processes
 Training for self-service year-end reporting
 Realignment of special periods?

49
 Data Conversion Objectives
 Populate SAP with the master data needed to run
the business
 Define processes for managing open items
throughout the implementation processes
 Minimize the amount of historical data to be
converted from existing systems to SAP
 Minimize the timeframe to complete the data
conversion process
 Populate SAP with clean Data

50
 Data Conversion Types
 Master Data
It is often downloaded, converted and uploaded
 In-Process Transactional Data
Originates outside SAP and completes in SAP
 Point-in-time Balances
Prior to process a business activity in SAP, balances will
need to be converted from Legacy systems
 Historical Data
Transactional Data that has completed its business cycle
and is needed only for inquiry and reporting purposes

51
 Conversion Considerations

 The requirements to run the business

 The testing effort required
 Conversion interdependencies
 Effort involved in collection
 Choosing the right time and resources

52
 GL Conversion

Fiscal Year End Go-live Load budget (approved if available, otherwise

contingent)
Convert Opening G/L Balances by Fund/BA
Convert Life-to-Date Rev/Exp (at a summarized
level) for Projects & Grants

Mid-year Go-live Load current budget

Convert opening G/L balances by Fund/BA for the
beginning of the year
Convert YTD actuals by summarized account
assignment
Convert Life-to-Date Rev/Exp (at a summarized
level) for Projects & Grants

53
 GL Balance Conversion Process

 Extract balances to be converted

 Reconcile extraction file to source system
 Map balances via crosswalk tables in SAP
 Upload the balances via conversion program
 Reconcile loaded data to extraction file

54
 Conversion
General Ledger

Conversion Accounts
 Conversion requires interim accounts,
conversion accounts, to upload the Data
 Conversion account are reconciled later to
appropriate accounts, the effect zeros out the
balances in conversion accounts
 Conversion accounts act as intermediary
accounts to help maintain accuracy while
performing conversion

55
 Conversion Preparation

 Clean-up of existing Data

 Cleansing done prior to loading data in SAP
 Loading poor quality data could result in
incorrect business decisions
 Staff with detailed understanding of Data they
are working with, should perform the cleansing
process

56
 Potential Risks

 Unavailability of Balances by Funds/BA

 Getting all postings in on time – No lag
 Offline postings to be completed in AFS for
accurate reflection of financials
 Mapping Exercises to start now (during
realization start populating mapping tables)

57
 Next Steps

 Prepare and send out meeting minutes to

invitees.
 Draft Design Document is prepared.
 Follow up on action items identified during the
workshop.
 Schedule off-line meeting (s) to discuss areas of
special concern
 Plan follow on workshops, as required.
 Plan validation workshop.
 Ensure all to-do’s are appropriately documented
58
 Questions?
? ? ? ?
? ? ? ? ?
? ? ? ? ?
? ? ? ?? ? ? ? ? ? ? ? ? ?
?
? ? ? ? ? ? ? ? ? ? ?
? ? ? ? ? ? ? ?
? ? ?
? ? ?
? ? ? ? ? ? ?
? ?
? ? ? ? ? ? ? ? ?
? ? ? ?
?
? ? ? ? ? ??
? ? ? ? ? ?
? ? ?
? ? ? ?
? ? ? ? ? ?
? ? ?? ? ? ? ? ? ? ?
? ? ? ? ? ? ? ? ?
? ? ? ?? ? ? ? ? ? ?
? ?
? ?
?