1.   Post All Adjusting Journal Entries

Post any necessary adjusting journal entries. Create required recurring entries on the Create Recurring Journal Entries screen and review them in the Enter Journal Entries screen, where you can change them, if necessary, before posting them.

All journal entries made to accounts receivable, accounts payable, fixed assets, accrued salaries, and labor accounts in Costpoint General Ledger should be set up to reverse in the next period. To properly maintain the subsidiary ledgers, you should make any adjustments to these accounts through Cash Receipts, Costpoint Billing, Costpoint Accounts Payable, Costpoint Fixed Assets, and Costpoint Labor.

2.   Post All Journals to the General Ledger

After you post journal entries, post all transactions for the period from all other transactions journals. If you fail to post outstanding transactions for the period, you may have to repeat closing steps. One way to ensure that all journals have been posted is to run the Close Periods process using the test option. That test process will detect journals that have unposted records. If you do this, make sure that you select the Test option and not the Test/Close Pd option. The Test/Close Pd option tests the journals and then automatically closes the period. Make sure you retain the printed journals when you post. They are part of the audit trail for the closing process. The only way to recreate these journal printouts after you post is by using IBM Cognos Impromptu.

3.   Post and Then Freeze the General Ledger

After you finish posting all known journals and journal entries to the general ledger, freeze the general ledger by notifying all staff that no further transactions can be posted to the period being closed, or by disabling data entry in Costpoint. You can disable data entry for individual modules in the Entry Edit Status subtask of the Manage Subperiods or Manage Accounting Periods screen. Deltek recommends that you disable data entry for Accounts Payable, Labor, Journal Entries, Cash Disbursements, Cash Receipts, Fixed Assets, and Payroll at this point in the closing process to prevent any new entries for the period. That, in turn, will make the closing process proceed more smoothly.  If you do not disable data entry immediately after posting all journals, you should double-check the journals to ensure that they have no unposted transactions. (Note that disabling data entry does not disable posting of transactions that have already been entered.)

4.   Run a Test Close

Use the Close Periods screen to run a test close for the accounting period. When Costpoint processes a test close, it looks for any unposted transactions.

Be sure you use the Test option and not the Test/Close Pd option.

5.   Reconcile Labor History to the General Ledger

Use the Print Labor History to General Ledger Comparison Report screen to ensure that the labor history tables are equivalent to the general ledger tables. You should run this utility before you start the revenue and billing processes. For most revenue and billing calculations involving hours, the hours data comes from the Labor History table, but the related amounts come from the general ledger tables. Therefore, the two must agree. If you make journal entries to a labor account without entering data in the Employee Labor subtask or Vendor Labor subtask, Costpoint only the updates the general ledger tables, causing them to disagree with the labor history tables. A failed posting can also cause an out-of-balance condition between these tables. Because hours are crucial in determining revenue and billings for Loaded Labor and Cost Plus Fee on Hours calculations, you must be sure that you have properly recorded all hours in the labor history tables. This utility can assist you with that task.

6.   Update Financial Statement Summary Balances

Run the Update Financial Statement Summary Balances process to determine whether your General Ledger Posting Summary (GL_POST_SUM) and Financial Statement summary (FS_SUM_) tables are in balance. These tables should always remain in balance, but failed postings and system crashes can throw them out of balance. If that happens, financial reports could display inconsistent data. When you run this utility, only use the Fill Balance work table with differences option. The utility will display the account/organization combinations that are out of balance.

If the tables are out of balance, do not run the utility with the Update FS table with differences option without first calling Deltek Customer Care. You may need to check some of the data in your tables before you start the update process. When you run the utility using the update option, it updates the Financial Statement Summary (FS_SUM) table with data from the General Ledger Summary (GL_POST_SUM) table. Before you do that, you must ensure that the General Ledger Summary (GL_POST_SUM) table is correct and in balance.

7.   Enter and Post Intercompany Receivables

If you use intercompany receivables, create and post those entries.

8.   Reconcile Subsidiary Ledgers to Financial Statements

Complete this critical step each time you close a period. If you do not reconcile these ledgers each period, they become much more difficult to reconcile. You may find it easier to reconcile the subsidiary ledgers using the Trial Balance report. The subsidiary ledgers that you need to reconcile are Accounts Payable, Accounts Receivable, and Fixed Assets. In addition, you must reconcile all bank accounts once each accounting period. We recommend that you include this as part of your closing period process. Make and post any needed adjusting journal entries to reconcile.

9.   Load Labor Rates for Billing and Revenue

If you have any Loaded Labor revenue or billing formulas, you must run this process before you calculate billings or revenue. This process loads the billing rates specified on the Manage Rate Sequence Orders screen into the Labor History table. The Compute Revenue and Calculate Standard Bills processes use these rates to calculate revenue and billings. Because each rate is multiplied by the related hours, it is imperative that the hours are correct in the Labor History tables. (See Step 5 above.)

10. Process and Post Billings

Most companies compute and process billings as soon as possible. However, you can perform this step any time during the period closing process after completing steps 1 through 9 and before finishing the financial statements and reconciliations. If you run billings at actual rates, you must compute your indirect rates before starting the billing process. See Calculate Standard Bills and related topics for more detailed information on calculating billings. You must process billings before computing revenue if you use any Revenue Equals Billings revenue formulas. You may also want to generate the Unbilled Analysis report after you complete the revenue and billings, to help you analyze the unbilled receivables balance.

11. Perform Pool Maintenance

Run the Validate Pool Acct/Org Setups screen to review your pool setups.

 12. Compute and Process Indirect Rates

After you post all journals to the general ledger, compute and print indirect rates. Keep in mind that the indirect rate computation uses amounts from the general ledger. Therefore, it is crucial that the information in the general ledger is current and correct when you begin this process. The Statement of Indirect Expenses (printed from the Compute and Print Pool Rates screen) is generated at the end of this process. Carefully review this report and make any necessary corrections. If you make corrections, you must recompute the indirect rates. You may also need to recalculate the billings. It is important to complete this step before you run the Compute Burden Cost process.

13. Post Indirect Rates

Use the Post Pool Journal screen to post all indirect rates for all pools to this fiscal period.

14. Reconcile the Statement of Indirect Expenses to the Income Statement

Costs on the income statement should match the costs to be allocated on the Statement of Indirect Expenses (generated from the Compute and Print Pool Rates screen). You may have small rounding differences between costs to be allocated and the indirects. Review the pool base on the Statement of Indirect Expenses and on the income statement.

You should reconcile the Statement of Indirect Expenses to the financial statement lines on a pool-by-pool basis. This ensures that all pool expenses are included in the rate calculations.

15. Compute Burden Cost

The Compute Burden Cost process is the starting point for all cost and revenue computations. It is crucial that you compute burden cost at the correct time and for all subperiods within each period. This process builds the Project Summary (PROJ_SUM) table and Project Burden Summary (PROJ_BURD_SUM) table. Costpoint uses these tables to calculate revenue, produce Project Summary Reports, and produce the Revenue Summary. You must run the Compute Burden Cost process for each subperiod. Each time you make an adjustment after the closing process has begun, you must recalculate burdens so that the adjustment is reflected in revenue and in data on project reports. Most problems in the cost and revenue areas are the result of not computing burden cost at the correct times.

16. Compare Project Ledger to the General Ledger

Use the Compare Project Ledger to General Ledger utility to generate a report of cost differences between the two ledgers.

17. Process Revenue and Then Post

After completing all of the above steps, process and post revenue. See Revenue Processing for a step-by-step guide to the revenue process. After you compute and post revenue, review the financial statements and reconcile them using the Revenue Summary Report.

18. Run the Update Project Status Report Table Process and the Update Other Project Report Tables Process

Use the Update Project Status Report Table screen and the Update Other Project Report Tables screen to prepare project data for financial statements.

19. Update Financial Statement Summary Balances

Repeat step 6 at this point in your closing process because you have posted revenue and billings.

20. Print and Review Financial Statements

Print and review your financial statements. Use this set of statements for reconciliations and for identifying areas that require adjustment. You may want to print the income statements at the highest and lowest levels of the organization to identify missing and incorrect amounts and to look for misclassifications between organizations.

21. Reconcile the Income Statement to Organizational Cost Summary, Project Status Report, and Revenue Summary

This reconciliation helps ensure that you ran the Compute Burden Cost process at the correct time. The data on the Organizational Cost Summary report comes from the Project Summary (PROJ_SUM) table and Project Burden Summary (PROJ_BURD_SUM) table, while the data on the income statement comes from the General Ledger Posting Summary (GL_POST_SUM) table. If you cannot reconcile the two reports, you may have posted entries to the general ledger after you computed burden. As a result, cost and revenue are incorrect on the project reports and revenue is incorrect on the financial statements. This reconciliation also helps identify where misclassifications exist between organizations.

22. Reconcile Unbilled Analysis to the Balance Sheet

Generate the Unbilled Analysis report and reconcile it to the balance sheet. You can also use this report to analyze components of the unbilled balance after you complete the closing process. Keep in mind that you must create the Unbilled Analysis Report table before you can generate this report.

23. Reconcile Other Material Balances on the Financial Statements

Make sure that any other material balances not previously identified are reconciled to supporting documentation.

24. Make Adjustments

Make any adjustments necessary to correct problems discovered in the above steps. If any of these adjustments affect income or expense accounts, you will probably need to complete some or all of the steps in this procedure again.

25. Print Final Financial Statements

After you complete all necessary adjustments and reconciliations, print the final financial statements. Keep a copy of these statements in a safe place, because these are the statements that will be distributed to management and outside sources.

26. Close the Period

Close the accounting period.

You may want to do a test close before closing your period. The test close identifies journals that cannot be closed because of unposted transactions. During the test, Costpoint checks for unposted entries in the following areas: cash disbursements, vouchers, journal entries, cash receipts, allocation journal entries, manual bills, unit usage, intercompany receivables, labor distribution, fixed assets and inventory transactions. In addition, Costpoint checks other areas for unposted entries (for example, Standard Billings, Customer Product Billings, Project Product Billings, and Payroll journals) and gives you a warning if it finds unposted transactions. In this case, you have the option to close the period without posting the transactions. In many of these cases, you will want to continue with the closing process.

When you actually close the period, the Close Periods process sets the status of the period to Closed on the Manage Accounting Periods screen and sets the status of the subperiods in that period to Closed as well. The Entry Edit statuses for both the period and subperiods are set to Not Available. If you use Costpoint Payroll, timesheets that you have posted to the general ledger and computed for Payroll are no longer be available on the Manage Timesheets screen. However, they still exist in Timesheet History Inquiry, and you can review them on the Timesheet History report. If you do not own Costpoint Payroll, the closing process deletes the timesheets if you have posted them to the general ledger.