Ultimate Guide: Mastering Month-End Closing With Microsoft Dynamics NAV 2017

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Mastering the Month End Blog Series: General Ledger

As with other ERP solutions, the month end close process in Microsoft Dynamics NAV is unique. This series leverages what is unique to NAV in order to help you draft your own period-end checklists and covers the following areas:

In the first post in this series, I’ll outline how to perform month end close tasks related to the General Ledger, including: setting up standard and recurring journal entries and limiting posting dates.

Mastering the Month End: The General Ledger

Standard Journals

A standard journal allows users to save frequently used adjustment journal entries to a template defined by a unique code.

This helps to reduce the amount of time required to perform data entry at month-end and provides a way to manage entries that are posted on a regular basis (i.e. payroll, loan interest).  When a template is created, the user has the option of including the amounts entered on the journal if needed.

The steps for entering and posting a Standard Journal entry are:

  • Create the journal entry lines with the required information (i.e. posting date, document no., account, description, amount, and dimension entry if applicable)
  • Click on “Save as Standard Journal” in the ribbon. In the pop-up window that appears, enter a unique code and description for it (i.e. LOAN INT).  Select the “save unit amount” field if you want to save the values in the amount field of the standard journal. Click “OK” to save.
  • To post the entries using the Standard Journal, click on “Get Standard Journals” in the ribbon.
  • Select the relevant code. Click OK.  The system populates the lines in the journal then click Post.

Recurring Journals & Accruals

Often, when finalizing a month, there are a series of recurring journal entries that need to be posted – whether it’s a manual entry of amortization, insurance, payroll items, rent allocations, or any other entry that needs to be posted month-after-month with similar accounts, and so on.

Within NAV, the Recurring Journal activity can be used for this purpose. Recurring Journals are used for managing transactions that are posted frequently with few or no changes. As with the Standard General Journals, the lines entered in the Recurring Journal batch are retained after posting.

To set up a Recurring Journal in NAV:

  • Go to the Recurring General Journal activity either by using the search function or navigating to Departments > Financial Management > Periodic Activities > General Ledger;
  • Create a Journal Batch and give it a meaningful name and description; like “ _____”

 

Mastering the Month End: General Journal Batch

 

  • Edit the batch and create your entry as you would a normal journal entry, with the following additional components:
    • Recurring Method – this is where you define what kind of recurrence it is;
      • F (Fixed) – uses a fixed amount (e.g. $100.00) and retains that after posting;
      • V (Variable) – uses a variable amount (e.g. $100.00) and deletes that amount after posting;
      • B (Balance) – uses the entire balance of an account, allocated among the accounts specified in the Allocations worksheet (accessible on the ribbon);
      • Reversing F/V/B – same as above, with a reversing entry put through the day after the posting date (used principally for accruals);
    • Recurring Frequency ­– formula for updating the next posting date after this one;
      • 1M = 1 month (
      • 1D = 1 day
      • 1D+1M-1D = last day of the next month regardless of how many days in that month;
      • Use the Help function in NAV to see more options
    • Expiration Date – the last date that the entry can be posted (i.e. when recurrence should end);
  • With Document No. and Description, you can use wildcards to update these fields with the date information. For example:
    • %1 – posting day number | e.g. “Dec %1 Insurance” à “Dec 31 Insurance”
    • %2 posting week number | e.g. “Amort. – Week %2” à “Amort. – Week 52”
    • %3 – posting month number | e.g. “Rent %3/14” à “Rent 12/14”
    • %4 – posting month name | e.g. “Expenses – %4 2014” à “Expenses – December 2014”
    • %5 – posting account period name (pulls from the Accounting Periods descriptions)

 

After posting you will see that the dates are automatically updated:


Before posting

Recurring General Journal Before Posting

 

After posting

Recurring General Journal After Posting

 

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Does a “hard close” exist in NAV?

When periods are closed in most software, they are either hard-closes or soft-closes. Hard-closes are periods that are permanently committed to the entity’s database and are locked beyond ability to post to.

It is important to note that the Microsoft Dynamics NAV solution is a real-time ERP and does not, technically, have “hard-close” for a period end. The only way a month gets hard-closed is when you perform the year-end closing. As a result, the procedures outlined in these posts will demonstrate how to use soft-closing to administer your accounting records appropriately.

Note: Closing a period should happen after all your entries, invoices, bank reconciliations, adjustments, etc. for the period have been processed, as the closing process prevents posting to that period. This emphasizes the importance of ensuring that both internal procedures and system processes are aligned.

Limiting Posting Dates

To ensure integrity of data and reporting, you’ll want to be able to prevent posting to a period after all the necessary adjustments and entries have been posted to it.

There are two areas where you set the allowable posting dates:

  • The overall General Ledger settings – this is where a blanket rule is applied to all users of the system;
  • The individual user’s settings – this is where you can allow specific individuals to have access to periods outside of the General Ledger settings above. This may be appropriate for a Controller or Assistant Controller, who are all responsible for making adjustments of closed periods in a thought out and deliberate manner.

Blanket rules for all users

You can set the allowable posting dates for all users of the system:

  • Go to General Ledger Setup by either using the search function or by navigating to Departments > Financial Management > Setup > Administration;
  • Enter dates into the Allow Posting From and Allow Posting To fields to create a range of allowable posting dates (Note: leaving a field blank will allow any date);

 

General Ledger Setup

 

  • Click OK;

 

User-specific rules

To have specific override rules for an individual, you can set this:

  • Go to User Setup by using the search function or navigating to Departments > Administration > Application Setup > Users > User Setup;
  • Click “Edit” on the user’s ID (if user is already in the list) or click “New” and select the User ID from the field drop-down;
  • Enter relevant dates in the Allow Posting From and Allow Posting To fields (Note: any fields left blank will inherit the rules from the General Ledger Setup above);

 

Specific User Posting Rules Month End Close Process

  • Click OK

Additional Questions about the General Ledger?

If you have additional comments or questions send us an email or leave a comment below. Also, don’t forget to check out the other posts in our Mastering the Month End Close with Dynamics NAV series:

Comments

  1. Hi there, I started implementing NAV back in the 3.7 days with the old classic layout and then moved on to 4 and 5. I took a break for a while but went back to my good old favourite this past year as a bookkeeper rather than a NAV Consultant and am looking after a client on NAV 2013RTC. I enjoyed reading your article as it proved I’m still doing things the right way, but I so wish NAV would move on a little in the financials, ie importing and matching Statements like MYOB, XERO and even COINS. I also wish the Bank Rec Report was a little more sensible, back in the day I asked my developers to re-write for our accounting client users. I hear NAV 2015 has had a bit of leap on the financials – looking forward to that..! Thank you for taking the time to write your articles, I used to have a month end paper for my clients back in the day – it is so useful and important. Good on you for not forgetting the Financial Bods! 🙂

  2. Hi Vicky,

    Thanks for your comment!
    They’ve definitely stepped things up in 2015 especially with the “Payment Reconciliation Journal,” which allows you to upload you bank statement, auto-match, and reconcile incoming and outgoing bank payments. Not to mention that North Americans now have the option of using the statement-importing and auto-matching Bank Reconciliation function, which used to be a European (rather, “Worldwide edition”) exclusive. The buzz was big with us consultants over these features, but we’ll really hear the “oohs” and “aahs” as more users upgrade from prior editions.

    Ramin

  3. Joseph McCloud

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  4. Andrew

    Thanks for posting this Ramin! This is very helpful. We are tightening up on our month-end closing process and this was one of the main things I wanted to make sure was understood.

  5. Peter Niclasen

    Very nice write up. Thank You !!

  6. Karen

    Is there a way to set recurring journal entries to automatically reverse in the following period?

    1. Hi Karen,
      Absolutely — in the Recurring Journal, there’s a field called “Recurring Method”. The first three options are Fixed, Variable, and Balance, which post to an individual date, however the next three options are Reversing Fixed, Reversing Variable, and Reversing Balance, which does exactly what it sounds like: post the reversal on the next calendar day.

      So if your posting date is, for example, July 31, 2017, the reversing entry will happen on August 1, 2017, therefore falling in the next period (assuming calendar month periods).

  7. Matt C

    I use NAV 2009(but it works similarly to future iterations). I have a Recurring Fixed JE that we need to change. We’ve tried to update the amounts twice now, but it reverts back to the original amounts each time we post.

    It is a standard entry but we need to update the amounts every once in a while.

    1. Bridget Bedard

      Hey Matt,

      In this case, I’d probably recommend toggling to variable and then back to fixed and change the amounts. It may be a case of NAV not registering any Rec changes when it’s on Fixed and already has an amount. Send me a message again if that doesn’t work.

      On that note, my colleague, Blair, is also hosting a NAVUG webinar on June 27th on “Best Practices for Month-End Cost Allocation.” Might be worth checking out as it covers a lot re: recurring journal types.

  8. Urvi

    Hi There can you please with month end task on Navison 2017

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