Calendar Year End Payroll

The Physical Inventory module in DBA & Evo-ERP is a powerful module but it is necessary to understand what it does and does not do. The PI module is designed to reconcile on-hand quantity of inventory counted with the on-hand quantity per the computer and make adjusting transactions. It is not designed to be used to edit unit costs of on-hand inventory so you need to get inventory unit costs as accurate as possible before using the PI module. The PI module is looking at on-hand inventory; it does not include Work In Process. It will prompt for Lot and Serial numbers for parts under Lot or Serial number control. The references to programs in this document refer to the menu choice. For example, PI-A refers to menu choice A on the PI menu button, Capture Frozen Inventory.

In a nutshell, the inventory is processed as follows: PI-A takes a snapshot of the on-hand quantities. Items are counted and counts are entered manually or imported using PI-C. PI-F gives reports comparing the "frozen" on-hand and value to the counted. PI-G then posts transactions for the difference between frozen and counted quantity for each part number. If FIFO or LIFO costing is not used, then once counting is complete, other users can process inventory related transactions while the counts are being entered in PI-C because the PI module is isolated and is only comparing the counts to the frozen snapshot. Whatever happens after the snapshot is taken is immaterial to the PI results. For example, if the snapshot showed 10 widgets on hand and the count came up with 12, then the adjustment would be for +2 regardless of the on-hand quantity at the time the adjustment is posted.

Prior to beginning a Physical Inventory, run UT-K-I to remove any binary zeroes from the Location field as these can cause problems with the PI module. Better yet, use UT-K-E and change the blank Location to a named Location to reduce the chance for future problems. Then, use IN-L-K to identify parts with zero or inaccurate costs and make any necessary corrections using IN-K or IN-L-H. Finally, run a master level reconciliation in SM-J-C and recalculate book value (UT-K-G) and, if desired, also run a transaction level reconciliation.

The first step in actually taking inventory is to run PI-A, Capture Frozen Inventory. This program takes a snapshot of the on-hand quantity and costs of the inventory to be used as a comparison to the counts entered. Before running PI-A, you need to be sure that all Sales Order invoices for parts that have physically left the premises and will not be included in the count are posted in SO-G so the shipped items are removed from on-hand. Similarly, all PO receiving for parts that are here and will be counted must be entered in PO-C before running PI-A. Finally, if you use WO-G to issue materials to work orders, all parts that are on the shop floor in work orders need to be issued so that they are also removed from on-hand. If you use Backflushing at Enter Finished Production, then you must include all components in WIP when you enter the counts because these items are not depleted from on-hand until the work order finished production is reported.

PI-A prompts for a date. You can enter a prior date but be advised that the snapshot is of the current inventory status, not a recreation of prior on-hand quantities regardless of the date entered. When you run PI-A, you must select either a Type 1 or Type 2 inventory. The difference between the two is the way uncounted parts are treated. If the snapshot shows an on-hand quantity and no count is entered, for a Type 1 inventory, no correction will be made as it is assumed to be a partial inventory and the part was simply not counted. If the snapshot shows an on-hand quantity and no count is entered, for a Type 2 inventory an adjustment will be made zeroing out the on-hand quantity as the assumption is that a Type 2 is a complete inventory and all items are counted. If no count is entered, then there are none and the on-hand should be zeroed out.

When PI-A is run, you can select which locations to include (if you have multiple locations). Each time you run PI-A, you give the inventory a year and a number so that each inventory is maintained separately. You can take as many as 99 snapshots per year in PI-A. There is no requirement that counts be entered. You may choose to run PI-A every month to take a snapshot of month-end inventory even if you are going to actually enter counts only once per year. Each snapshot is saved with its own inventory number and can be reported on later at any time until purged by PI-H. Once PI-A is run and the snapshot taken, you can run PI-B to get a report of what was in the snapshot. This report can be used for analysis or as a count sheet. To use as a count sheet, it is recommended that the on-hand quantity not be included so the counters are forced to actually count the parts. Unit cost can also be suppressed if desired.

You can use the PI-B report as a count sheet or you can purchase pre-numbered 2 part tags from an office supply store (such as Office Depot catalog #504568). If you do not use pre-numbered tags, then you can use any sequence of numbers as "Tag Numbers". Once you have counted your inventory, if you are not using FIFO or LIFO costing then all other DBA users can go back to work and ship and receive inventory while you enter the counts and analyze the information.

Counts are entered using PI-C, Enter Tag Counts. A part can have more than one tag entered and the program will add the quantities together. If a part is subject to Lot or Serial Control, a separate tag count must be entered for each lot or serial number. Tags can include Bin Location and the employee number of the counter (both are optional). Once tags are entered, PI-D can be used to find any missing tag numbers. If a part is found during the counting process that does not already exist in the DBA inventory file, use PI-C to create it when the tag is entered. Do not use IN-B to create the part first. Once all the counts are entered, PI-F gives the frozen quantities and value, the counted quantities and value and the difference. PI-F also offers a Physical Inventory Value report including the total counted and frozen value, and the difference subtotaled by product class and by GL Account. Finally, PI-G posts the transactions for the difference between frozen and counted value and optionally makes GL postings as well. It will make a separate GL posting for every part number so you my well want to answer N to the GL posting and make a lump sum journal entry for the total vale of the correction. Even after the PI update is posted, you can run the PI-F report at any time. PI-H need never be run but if you have accumulated a number of inventories and want to delete some of the older ones, you can use PI-H to purge the data from the PI files. Once they are deleted, they are gone and the PI-F and PI-B reports can no longer be run.

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Fiscal Year End

If December 31 is also your fiscal year end, then on January 2, you should run AM-B - Fiscal Year End Routine. This does NOT mean you must have made all entries for December. You can continue to make entries for the prior year; they will be considered “one year past". The way a new fiscal year is handled was changed with DBA version 2000.1 so there are 2 sets of procedures, depending whether you are on version 2000.1 or later or still using a prior version.Prior to version 2000.1, all programs that could potentially make a GL transaction such as receiving purchase orders, posting sales invoices and processing labor and materials to work orders would not accept a date into the new fiscal year. It is necessary to run AM-B Reset Year End Balances before any activity can be entered dated in the new year.

Beginning with version 2000.1, all programs can make entries dated into the new year but GL-O can not post the transactions to the general ledger until AM-B (now named Fiscal Year End Routine) is run.

In either case, whether you are using version 2000.1 or a prior version, running AM-B IS NOT a year end close. It moves the balances one year back, rolls balances forward for Balance Sheet accounts and closes income and expense accounts to Retained Earnings. Transactions can still be dated in the prior year and, when they are posted and financial statements are run, the system will recalculate earnings. The control of backdated entries is the GL Close Date set in AM-A, not the fiscal year date. While 2000.1 allows other departments to continue operation, AM-B should still be run early in the year so that GL-O can be run and transactions posted before too many accumulate.

As for other reports typically run as part of period end closing, such as Inventory Value, WIP Summary, AR & AP Agings, etc., with the latest IS Tech Support updates to Evo-ERP & DBA, virtually all reports that are used to reconcile subsidiary detail with the General Ledger balances can be run as of a prior date so there is no urgency to run them before transactions can be entered into the new year.

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Calendar Year End Commissions

To clear the monthly commissions as seen in CS-B and on the CS-C report as well as roll any unpaid commissions for December over into January of the new year, go to CS-Q -Commission Year End Routine.

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Calendar Year End Payroll

After you have run the final December payroll but before you run the first January payroll, you need to run all the payroll reports that do not ask for a pay date range such as PR-L-A. Any reports such as PR-L-B that have date ranges can be printed at any time because they are looking at the pay history detail rather than the YTD or QTD subtotals in the employee file that get cleared. Once you have run the reports, you can run PR-O Payroll Year End Routine. This will copy the YTD pay information for all employees into the file to be used to print W-2s and zero out all the pay information to start hte new year. W-2s can be printed at your convenience because they come from the file created by PR-O.

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