Operational Procedures

Operational procedures are procedures that must be performed in a timely fashion at the end of each accounting period. These required procedures perform the following functions. They prevent transactions from being posted to incorrect periods, they provide the valid subledger reports that are required to validate and close the General Ledger at a later time, and they allow users to begin processing in the next period. These procedures should be done at the end of the last day of each accounting period before any transactions are processed in the next period.

RA Valuation Logic

The value of  open and “received but not disposed of “returns in your system are not tracked in the general ledger system.  The goods on an ra are treated as owned by the customer up until the point that you “dispose of” or “close” them (normally by issuing the customer a credit memo).    If an ra line item is disposed of, the system creates a credit memo for the customer for the amount of the returned goods and this credit memo is processed using the Accounts Receivable system. 

Integration with Accounts Receivable.

The RA module automatically creates accounts receivable invoices, and these invoices are included in the accounts receivable sub-ledger and general ledger balances. 

The primary month end operational procedure for the RA module is to ensure that all invoices for a given period (normally month) are created before the final sub-ledger and general ledger reports for the period are produced.

Enter and Post all of the Following Transactions Through the End Of Period

Sales, Debit and Credit Memo Processing

Cash Receipts Processing

Change the Default Accounting Year and Period to the correct values for the next period.  Note: This step is normally performed by the controller or a general ledger accountant with access to the appropriate program.  This step is normally also synchronized with the other departments or areas of the company that create accounting transactions such as the payables department, the invoicing department, receiving, etc.  The basic idea is to run the final reports for all sub-ledgers, then immediately change the period to ensure that all reports produced use a valid cut-off.

Change the System Date.  Once the final sub-ledger reports have been run, no transactions should be processed that affect any of the sub-ledgers until both the system period and year and the system date have been changed.  This step ensures that all transactions for the new period are booked with the new period and a date that corresponds to the new period.  Note:  The system date is normally set to the current date automatically each time an operator accesses the system.  This step should happen automatically if the system period is changed promptly at month end and if the operators in the system do not process any transactions until the following day (the first of the new month).


Closing Procedures