Before you complete a period close, you must:

• Understand how accounting entries are automatically created and posted to the GL.
• Set up Kenandy to reflect your company accounting requirements.

  This setup includes the following tasks:

  • Establishing your accounting cycles (such as periods, cutoff dates for GL areas—all GL areas function the same way—GL close dates, and so on).
  • Creating your GL accounts.
  • Setting up your accounting rules (such as the source documents—customer invoices, shipping documents, and so on—that affect each GL area).
  • Configuring your foreign exchange criteria (if applicable).

Closing a period consists of the following main steps:

1. View the period close dashboards for GL areas, and investigate exceptions. To learn more, see Work With the Period Close Dashboards for GL Areas.
2. Validate each GL area (except the GL area for journal entries), and clear any accounting entry exceptions.
3. Rerun validation for GL areas (if necessary).
4. Close each GL area.
5. Validate the GL area for journal entries.
6. Process unrealized foreign exchange, if applicable. To learn more, see Foreign Exchange.
7. Close the GL area for journal entries.
8. Reconcile the GL accounts.
9. Close the period.

The following illustration shows this process:

After the JE cutoff (which occurs after all cutoffs for other GL areas), you can no longer create new accounting entries or modify existing ones. After the JE cutoff, you can close the period. However, you can re-open the period, or any of the GL areas, to make revisions. A revision might be correcting a source document that contains an error or backdating a source document from a future period to the re-opened period. Then you repeat the close process. You can repeat the close process until the period is permanently closed.

The period close process milestones follow:

• GL area cutoff. After this date, no new source document can post to the period. However, you can backdate source documents—that is, change the posting date of finalized documents from after the GL area cutoff of a period to before the GL area cutoff. To learn more, see Backdated Source Documents.

  You cannot close a period until after all cutoff dates for GL areas pass.

• JE cutoff. After this date, you cannot re-open the GL.
• Period close. You cannot close a period until its cutoff date passes. Before you can close a period, you must validate the accounting entries in each GL area. When you find no exceptions in the validations, you can close the period. However, you can still re-open the GL area for journal entries.
• Permanent period close. On or after this date, you can no longer re-open the GL. The financial data on this date is final and permanent.

Before you can close a GL area or period, you must validate every accounting entry in each GL area. Validation reviews each source document that meets at least one of the following criteria: 

• The source document is finalized before the cutoff date for the GL area.
• The accounting entry for the source document is before its Valid After date.

Validation verifies the following conditions: 

• An accounting entry is generated without exceptions.
• The data in the accounting entry matches the data in the source document or journal entry. This data includes:
  • transaction date
  • finalized date
  • finalized state
  • segment objects and segment object values
  • cost information
  • transaction currency
  • any other data values captured for inclusion in the account entries

You can validate a GL area at any time by clicking the Validation button for the GL area. When you validate a period GL area for the first time, all the accounting transactions for the period that are before the Valid After date are automatically re-created. The next time you validate the GL area for the period, transactions are validated beginning from where the validation stopped for the prior validation. This resume-validation feature also applies if the validation stops before finishing. When you resume the validation, the validation starts from where it stopped.

Obsolete transactions are not included in the validation process.

You can modify the accounting rules and related information (standard costs, item classes, and so on) at any time. This modification does not affect the GL results because all accounting entry information eligible for regeneration is updated.

You can rerun the validation process to make sure that no one entered any late changes while you were validating the GL areas. To learn more about how Kenandy ensures the accuracy and integrity of financial reports, see Internal Controls for Reports.

The following dates to determine when and how to process a transaction:

• Period Start (PS) and Period End (PE): The dates that determine the period in which a transaction is recognized. The transaction date is between these two dates. You configure a period start date when you first set up Kenandy. After this setup, you can provide only period end dates. All succeeding period start dates are automatically established. When you first set up Kenandy, you can establish your period end dates by using the Period detail page.
• GL Area Cutoff (GLAC): The date in the accounting cycle when accounting entries stop automatically generating. After this date, if you want to book additional entries for the period, you can create manual journal entries.
• GL Close (GLC): The date when automatic accounting entries and manual journal entries can no longer be booked in the period. After this date, the period is closed to all entries. You establish the GL close dates on the Period detail page.
• Transaction Date (TD): The date an economic event occurs. A transaction is automatically assigned to the period that is current when the transaction occurs. Each source document has a default transaction date.

  Default Transaction Dates for Source Documents

  Source document	Default Transaction Date
  Customer invoice	Date invoiced
  Customer receipt	Date received
  Inventory change	Date created
  Receiving document	Date received
  Shipment	Date shipped
  Supplier invoice	Date invoiced
  Supplier payment	Date paid
  Work order	Date created

• Finalized Date (FD): The date a finalized source document completes its lifecycle. An accounting entry is automatically generated for the document in the next scheduled batch process.
• GL Date (GLD): The date a transaction is posted to the GL.

Period close dashboards show financial activity, and help you to identify issues before the month-end close. They provide access to source documents and transactions entered in Kenandy prior to the GL area cutoff for each period.

A period close dashboard shows the number of exceptions for a GL area. Exceptions include source documents that did not generate any accounting for a GL area in a period. Period close dashboards provide links that you can click to access information about exceptions that prevent you from closing a period. Actions that you can take to clear exceptions include backdating some documents and accruing for others.

1. From the User Preferences page, select the company for the period close dashboard in the Default Company field.
2. From the Reports page, click Pre Close Dashboard (Installed Package Kenandy UI) in the left pane.

   A list of period close dashboards for GL areas is displayed in the right page.

3. Click the link for the GL area dashboard that you want to view.

   The Period Close Dashboard page is displayed with the following categories of information for the company that you designate in step 1:

   • Source documents that are missing accounting entries
   • Source documents that have accounting entry exceptions
   • Source documents that are not finalized
   • Source documents that are validated
   • Source documents that need to be validated
   • Source document lines that need to be validated

   If multiple periods are open, the dashboard shows data from the earliest open period. For example, if the May and June periods are open, the dashboard shows data for the May period. For each category of information, you can designate a different open period.

4. To investigate exceptions, complete the following steps:
   1. Click the source document link (supplier invoices, customer payments, and so on) for a category.

      A report from Pre Close Reports (Installed Package Kenandy UI) is displayed showing the source documents in the category.

   2. Click a link to access details about a source document or its corresponding accounting entry.
   3. Scroll down to the section about exceptions to view more details.

1. From the Periods page, click the link for the period that you want to close.
2. On the Period detail page that is displayed, click Manage Period Close.

   The Period Close page is displayed showing a section for each GL area.

3. To validate the GL areas, complete the following steps:
   1. Click Validation for a GL area.
   2. On the detail page for the GL area that is displayed, click Validation for the GL area.

      Information about the accounting entries that have exceptions, the reasons for the exceptions, and links to the corresponding source documents is displayed. You can navigate to the source document page to clear each exception. The types of exceptions follow:

      • Source documents that did not generate accounting entries
      • Accounting entries with exceptions
      • Accounting entries that were changed after the last validation (for example, if an accounting rule was changed)

      A list for each type is displayed on its own page.

      While a GL area is validated, a status icon is displayed on the prior page (the Period Close page), next to the GL area. When this status icon is no longer displayed, the validation is complete. Note the following information:

      • If there are no exceptions when the validation completes, a timestamp and a green check mark are displayed next to the GL area.
      • If there are exceptions when the validation completes, a timestamp and icon are not displayed. Click Validation for a GL area again to return to the detail page for the GL area and clear the exceptions.

      Depending on the volume of transactions, the validation process can take many hours. If you decide to quit the validation process, or if the process fails, the completed work is automatically saved. The next time you try to validate this GL area, the validation begins from where it stopped. For example, if you quit the validation process halfway through a 10-hour job, the job finishes in 5 hours when you click Validation for the GL area again.

      After you begin the validation process, Kenandy recommends that you do not change any accounting rules.

   3. After you clear all of the exceptions, click Validation for the GL area again.

      You click this button again in case anything changed, or in case any new entries were created while you were validating.

   4. When there are no new exceptions, click Close for the GL area.

      The GL area is closed, and the close is assigned a timestamp. The timestamp certifies that the GL area is closed. The Period Close page is displayed again, and a timestamp and a green check mark indicate the GL area is closed.

   5. Repeat the preceding validation steps to close all GL areas, except for the GL area for journal entries.
   6. Click JE Validation, and clear any exceptions.

      The GL area for journal entries remains open.

4. Process unrealized foreign exchange, if applicable.

   To learn more, see Foreign Exchange.

5. When there are no exceptions in the GL area for journal entries, return to its detail page, and click JE Close.
6. Reconcile your GL accounts.

   When you reconcile your GL accounts, you compare the GL accounts with the source documents, and ensure the source documents accurately reflect the GL account debits and credits—that is, source documents support each transaction, and those source documents are correct.

   Reconciliation compares the totals between all source documents and all GL accounts in a GL area for a period. It ensures that all source documents are accounted for in the GL and are associated with the correct GL accounts. After you book all of the adjustments, accruals, allocations, and so on, and close all of the GL areas again, complete the following step to close the period.

7. Complete the following steps to close the period:
   1. From the Period detail page, click Edit.
   2. Clear the Open checkbox, and select the Closed checkbox.
   3. Click Save.

      The GL area cutoff for the period must be earlier than the current time.

Verify that you have permission to re-open the closed GL area and period. You cannot re-open a GL area until you re-open the GL area for journal entries.

1. From the Periods page, click the link for the period that you want to re-open.
2. On the Period detail page that is displayed, complete the following steps:
   1. Click Edit.
   2. Clear the Closed checkbox, and select the Open checkbox.
   3. Click Save.
3. Click Manage Period Close.
4. Click Re-open JE.
5. Click Re-open for the GL area that you want to re-open.