The University ends its fiscal year as of June 30 each year. The fiscal year end close process is required to prepare the external financial statements presentation and prepare for the start of the next accounting year. The close process begins after June 30 and continues until the financial statements audit and various external yearend reporting are complete.
So how does normal Month end processing compare to Year End processing
Prep for month end -- In a normal month end, everyone should be ensuring that transactions are submitted, PCard verifications are up to date, internal and external billings are processed for the month. Throughout the month, you also want to update your employee costing prior to the payroll runs, so that PEDS corrections are not required later. Expense reports should be submitted in a
timely fashion and in accordance with policy, shortly after the completion of travel or the purchase date for business expenses. Travel expense reports should be submitted to approve within 15 days of return from your travel.
Closing the books - We normally close the books on the 3 rd day of the month for Grants, and the 4 th day of the month for GL.
Review Statements - Once the month is closed, departments should be reviewing the monthly statements and determining if any corrections are required. You want your statements to be accurate for anyone reviewing account balances, even in Funds Available Views. This is especially important for Sponsored awards, as many sponsors are billed monthly and it’s important that we do that accurately. We don’t want to overbill the sponsor and then need to issue a credit; similarly, we don’t want to underbill and not receive our funds promptly. As compensation often makes up the largest portion of our budget, it’s especially important to get PEDS corrections made timely. Special attention should be paid to any accounts in deficit.
Corrections - As a general rule, any corrections should be made in the month following the activity. While we technically have 90 days to make corrections , we want to bill sponsors correctly and we also want to have accurate financial statements. If you delay, you potentially run the risk of missing the 90-day window.
FYE-Season of multiple closes
Preparation for year end – should occur in June and first week of July ( preparation tasks , deadline list , or calendar view ).
Closing for June happens three times. When we close June, we are on an accelerated schedule, to prepare for the arrival of the auditors in August. We have approximately one month to ensure all fiscal year transactions are accurately recorded, get our correction entries made, and prepare our final financial statements.
Pre-close at the beginning of July – should include as much June activity as possible. All internal billing activities should be included so your charges are reflected correctly in the financial statements of those you’re invoicing. External Billings are important to correctly reflect the university’s receivables to external parties. We recognize that invoicing and Concur verifications do run on a lag, which is why we have another close later in the month.
- Review Statements - Much like in any other month, you should be reviewing your financial statements and identifying any corrections that need to be posted by July 27th. Additionally, you should be looking for anything that might be missing from your statements, like invoices. We need all FY23 invoices to be recorded as payables on the university books. Also, you need to review any accounts in deficit and make appropriate entries to fund any deficits. Continue to monitor deficits by reviewing your statements up until the JET deadline on the 27th. You can fix things now, or Grants/GAFR will be in touch for funding decisions after 2nd close.
2nd close at the end of July – The activity posted during 2 nd close should primarily be new invoices, Concur activity and correction and funding JE’s.
3rd Close in August - final Finance entries, accounting adjustments in preparation for the auditors and to book necessary financial statement transactions.
One last note, remember that during year end close we are on an accelerated timeline so processing days around things like pcard transactions is accelerated (for both cardholder and approver). This is also a time when you have less than 90 days to make corrections to your FY23 transactions.
After the third close is complete and our ending balances are finalized (August 7 th ), we then roll our FY23 ending balances forward as our FY24 beginning balances. (We will cover more details about the rollforward in July). After the roll- forward is complete, our FY24 will reflect accurate balances for the new fiscal year.