Accounts Receivable Year End Close Out Procedures

The end of the year signals the end of the accounting cycle.  For small businesses this event creates the opportunity to generate meaningful information, reset critical metrics, establish tax and payroll periods, and plan for the New Year.  Without the information generated from these end of year procedures, business and their owners would not be able to make informed decisions and gauge the company’s performance. The company’s books must be closed before these can happen.

The End of Year Close process will prepare your company’s accounting system for the New Year and the new accounting period.

This paper describes the necessary steps to perform Year-End processes in Cougar Mountain Software to close your business financial year.

These steps cover six Cougar Mountain Software modules;

  • Accounts Receivable (AR),
  • Inventory (IN),
  • Order Entry (OE),
  • Payroll (PR),
  • Accounts Payable (AP), and
  • General Ledger (GL).

Please remember two important points; always perform proper backups of your system before beginning your close process and you should perform the GL close process last.

To perform a backup of your data, follow these instructions:  Open the Main Menu, click Options > Back Up Company > Back-up, check the Data check-box, then click OK.

These are the instructions for the End of Year process for Accounts Receivable:

  1. Backup all your data files and store them off-site or in a fireproof container for your security.
  2. Run all your Accounts Receivable reports and file them in a secure place for future reference.
  3. Print Customer Statements immediately before purging.
  4. Select Purge Open Items from the Period End Menu. NOTE: Purging Open Items permanently erases statement data. If you have both Open Item and Balance Forward type accounts, this step will have a different affect depending upon the AR code type:
    1. For Open Item type accounts, purging will remove all open items with a zero balance.
    2. For Balance Forward type accounts, purging will compact all statement detail into one balance forward amount.
  5. Enter a Customer and/or AR Code Range to purge. Double-click in the Start and End fields to activate the lookup feature. Also, choose the Date to purge up to.
  6. Click OK to begin purge, or Cancel to exit without purging.
  7. Select Reset YTD Customer Totals from the Period End Menu to clear and reset year-to-date customer totals. It is necessary to reset the accumulators to zero if you are keeping track of year to date customer balances. Select OK to process, or Cancel to exit without processing. This must be done before activity is posted in the New Year to provide accurate year-to-date balances.
  8. Purge History: This utility will remove all history data up through the date you specify.
    1. Select Period End from the Task Bar.
    2. Select Purge History from the pull-down menu.
    3. NOTE: Purging History is not required and is only recommended if you would like to increase available hard drive space.
    4. Enter a Date you wish to use for the purge. Any items dated before this date will be purged.
    5. Double-check the date that appears in the pop-up window. If it is correct, click Yes. If not, or if you wish to change the date or cancel, click No.
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