After you approve and post transactions from the other Orion modules, create and post recurring entries, make any necessary adjusting journal entries, and print the financial statements, you are ready to close the period.

Types of Period End Processing

There are two types of end-of-period processing: month-end processing and year-end processing. Orion automatically knows which one is to be performed by the period number you are closing. Orion will process a month-end closing for periods 1 through 11 and a year-end closing for period 12.

Each General Ledger account within the Chart of Accounts contains a field for each accounting period balance in the current year as well as prior fiscal years. When any period other than the fiscal year-end period closes, the ending balance for the current period is copied to the beginning balance for the next period.  When the process is complete, the current period value is incremented to reflect the new period.

Posting to Previous Periods…. Every now and then it may be necessary to make an adjustment to a prior period. Orion allows this to occur by allowing you to backdate the period during the transaction processing (adjusting journal entries). The steps for posting to prior periods are as follows:

1. Using the General Ledger Transaction Processing screen, enter the transaction, assigning it to a prior period. The entry will resemble a normal transaction entry, but you must change the period to which you want the transaction to post. DO NOT accept the default current period that is displayed.

2. Using the Post Transactions screen (Action > Post Transactions), highlight the transaction(s) to be posted to the prior period. Print the Transaction Journal, and post the transaction(s).

3. Reprint financial statements and trial balances for the period to which the transaction(s) were posted and all periods between that period and the current period. Note: These documents form a financial record of the changes brought about by the posted transactions. Store them with the original documents.

Closing an Accounting Period:

The process of closing an accounting period includes several steps. The following steps are performed in GL Manager:

1. Approve and post transactions created by the Billing and Accounts Receivable and Accounts Payable modules.

2. Enter, print, and post all necessary adjusting journal entries (including recurring transactions).

3. Print a Trial Balance.

4. Track down and correct any errors.

5. Reprint the trial balance.

6. Print the income statement and balance sheet.

7. Close out the period.

Throughout the month, General Ledger transactions are created by Orion’s Billing and Accounts Receivable and Accounts Payable modules via the posting process within each module. To provide you with control over the General Ledger, these transactions do not update the General Ledger until you approve and post them in the General Ledger module. Transactions from the modules can be approved and posted in GL Manager at any time during the month and as often as you wish. The frequency should be determined by your internal accounting procedures. If you run financials frequently throughout the month, you should approve and post transactions several times throughout the month, maybe even daily. With the exception of actually closing the month, the steps can be followed several times during the month.

For purposes of this explanation, let’s assume your G/L Default Table looks like this:

Closing the Month – Billing and Accounts Receivable

Following are the procedures and steps that need to be taken in the Billing and Accounts Receivable module in order to close a month.

A. Create and post all invoices for the month. (Orion Billing Manager)

B. Confirm that all Payments, RAPs, TAPs, etc. are applied and posted by running the Unapplied Transaction Listing (Reports – A/R Transaction Listings). Enter 01/01/90 as the beginning date and use the last day of the month you are closing as the ending date.

C. Run the desired management reports for the month.

The following management reports MUST be run prior to entering transactions for the next period. We strongly recommend that you run reports 1-3 each month and file them since they cannot be re-created at a future date.

1. Aged Work in Process (Reports – Client-Matter Reports)
2. Aged Accounts Receivable (Reports – Client-Matter Reports)
3. Open Cost Report (Reports – Client-Matter Reports)
4. Timekeeper Productivity Report (Reports – Staff Productivity Reports)

D. Run additional management reports for the month. The following reports can be re-created at any time and are examples of those typically recommended.

1. Time Entry Calendars for all Timekeepers (Desktop Module)
2. Invoice Listing (Reports – Client-Matter Reports)
3. Payment Application Analysis (Reports – Billing And Revenue Reports)
4. Disbursements Analysis Report – Paid (Reports – Billing And Revenue Reports)
5. Daily Deposit Report – include PMT, RDP, TAP (Reports – A/R Transaction Listings)
6. Trust/Retainer Balance – not necessary every month (Reports – Client- Matter Reports)

Approving Transactions from Billing and Accounts Receivable

Use this procedure to approve transactions from the Billing and Accounts Receivable module and post them in the General Ledger.

To approve and post transactions:

1. From the button bar, click Action and select End of Period. The following screen appears:

 2. In the Display field, click either Unapproved Transactions or Unposted Transactions.

3. To approve and post the transactions to the General Ledger accounts, click Approve and Post.

Closing the Month – Accounts Payable

Following are the procedures and steps that need to be taken in the Accounts Payable module in order to close a month.

A. Make sure all vouchers, manual checks, and adjustments for the current period have been processed and posted.

B. Print the desired reports.

1. Check Register using the first and last day of the month as the date range. Verify all checks are posted in the current period, and if previous period checks have been voided in the current period, print a Voided Checks Report.

2. Open Voucher Listing.

C. Reconcile all bank accounts. Enter miscellaneous deductions such as automatic withdrawals, bank charges, etc.

D. Once the account has been reconciled, clear the reconciled entries.

E. Run a Bank Reconciliation Report (Uncleared Items) as of the last day of the month. This provides a list of outstanding checks and deposits in transit.

Approving Transactions from Accounts Payable

Use this procedure to approve transactions from the Accounts Payable module and post them in the General Ledger.

To approve and post transactions:

1. From the button bar, click Action and select End of Period. Click the Accounts Payable tab. The following screen appears:

2. In the Display field, click either Unapproved Transactions or Unposted Transactions.

3. To approve and post the transactions to the General Ledger accounts, click Approve and Post.

Closing the Month – General Ledger

Following are the procedures and steps that need to be taken in the General Ledger module in order to close a month.

Post any adjusting journal entries. These can be found under the Journal Entries Tab on the End of period screen. They can also be found by clicking Action, then Post Transactions.

Balancing Accounts Receivable and Trust Accounts

To balance the accounts, you need to have run all reports previously listed in this section.

A. Accounts Receivable Fees (1030) should equal the Total Fees column on the Aged Accounts Receivable Report. In order to balance back to this report, it must be run after all invoices and payments for the month have been posted and before payments for the next month have been entered and applied.

1. Verify that all transactions with a date prior to the current period have been posted from the Billing and Accounts Receivable module to the General Ledger by following the above steps.

• If the AR Fees General Ledger account is higher than Total Fees on the Aged Accounts Receivable Report, there are probably General Ledger transactions reflecting an unposted invoice that have not yet been transferred to the General Ledger module. These transactions can carry the date of the original invoice, but they should be posted to the current period.
• If the AR Fees General Ledger account is lower than Total Fees on the Aged Accounts Receivable Report, there may be General Ledger transactions reflecting invoices posted at the end of the month that have not yet been posted in the General Ledger module.
• Print the Daily Deposit Report or the Payment Application Analysis and include PMT, CR, WO, RAP, and TAP transactions.
• Check the total of the Daily Deposit Report or the Payment Application Analysis against the total credits to the Accounts Receivable Fees account (1030). Exclude from Total Credits those transactions with an invoice number in the Reference Nbr column since these transactions were created upon unposting an invoice. If the totals do not match, investigate any entries not on both reports.
• Print the Invoice Listing Report for the current period.
• Verify that the Total Fees Billed column on the Invoice Listing Report equals the total hitting the Accounts Receivable Fees (1030) account (total debits less any credits with an invoice number in the Reference Nbr column).
• Investigate any differences, looking for debits with the same invoice number. It may be helpful to run the Account History Report found in the Reporting System under General Ledger Reports.

2. Balance the receipt side.

3. Balance the invoice side.

B. Accounts Receivable Fees (1030) should be offset by Uncollected Fees (2100).

C. Accounts Receivable Expenses (1060) should be offset by Uncollected Expenses (2110).

D. Accounts Receivable Expenses (1060) plus AR Client Advances (1065) should equal the Total Expenses column on the Aged Accounts Receivable Report. Once again, these accounts will not balance if the Aged Accounts Receivable Report was not printed under the above discussed conditions.

E. A/R Client Advances (1060) should match the Total Unpaid Costs column on the Open Cost Report. The Open Cost Report must have been run prior to applying any payments for the new month or printing any new invoices.

F. If you are running on an accrual basis, Unbilled Client Advances (1050) should equal the Total Unbilled Costs column on the Open Cost Report. If you are on a cash basis, you will not be able to balance this without first running another report.

1. Run a Voucher Expense Listing for all open Vouchers for the Unbilled Client Advances (1050) account. This report should be run prior to entering any new Vouchers or paying any open Vouchers in the new month.

2. Add the total of this report to the Unbilled Client Advances (1050) General Ledger account. The total of the two numbers should equal the Total Unbilled Costs column on the Open Costs Report.

G. Unapplied Retainers (2090) should equal the retainer balance shown on the Trust-Retainer Balances Report.

H. The Default Client Trust Account balance (9000) should be offset by the Client Trust Liability Account and should equal the trust balance shown on the Trust-Retainer Balances Report. If you have more than one Trust Cash account, the total of the cash accounts should be offset by the Client Trust Liability Account (9001) and should equal the trust balance shown on the Trust-Retainer Balances Report.

Balancing Cash

All cash accounts should be reconciled to the bank balance. Your ending cash balance in the General Ledger should equal the Reconciled Balance from the Bank Reconciliation report plus any deposits in transit less any outstanding checks. You can use the Bank Reconciliation Report for these calculations. If it doesn’t balance:

A. Make sure all journal entries have been made for bank charges, miscellaneous cash, interest, etc.

B. Check all transactions from Source 2 (Accounts Payable) and again verify that the total credits match the Check Register total less any prior period checks voided in the current period.

C. Add total debits to the cash account from Source 1 and miscellaneous cash receipts entered through journal entries and verify that the total matches your deposit slips.

1. Run a Daily Deposit Report that includes PMT, RDP, TAP and MC transactions and add the total miscellaneous receipts not entered as MC transactions to it. Verify that the total matches the deposits on your bank statement. If not, check your totals by day.

2. If the daily totals match but the cash account is still out of balance, look for reversed payments. You can print an Application Reversals Report (A/R Transaction Listings) for assistance in this.

3. When all else fails, check all transactions with Source 1 against the Daily Deposit Report and investigate any found in the Account History but not on the Daily Deposit Report and vice versa.

Closing the Fiscal Year (See the article on Orion End of Year Procedures.)