As we approach the end of the year, it is time to shift our focus on closing the fiscal year and preparing the upcoming fiscal year. Closing the fiscal year in Deltek Costpoint involves a series of steps to ensure accurate reporting, compliance, and a smooth transition into the new fiscal period. In this blog, we'll provide a guide on the steps for closing the fiscal year in Deltek Costpoint, focusing on both the General Ledger and Project aspects.
Preparing the New Fiscal Year
Creating the New Fiscal Year
It is reasonable to believe that you will not have the final accounting period closed prior to the beginning of the new fiscal year. To ensure that you can properly capture costs, you will need to set up the new fiscal year, accounting periods, and accounting subperiods.
Cloning Cost Pools
You will need to clone the previous fiscal year cost pools to the following fiscal year. This includes updating the target and provisional rates for the cost pools. This is the only way to properly burden your costs for billing, revenue, and month end processing.
Updating Burden Ceilings/Overrides
The burden ceilings and overrides screens are set by fiscal year. It is imperative that you go through these screens and clone any burdens from the previous fiscal year to the next to ensure billing and revenue are calculated appropriately.
Other Issues
If you want to make structural changes to your system setup, the timing of these changes is crucial. For example, if you want to change project account groups, revenue levels or formulas, owning organizations for projects, etc., do not make these changes until AFTER you have computed the final revenue for the previous fiscal year. It is HIGHLY recommended that you consult the Deltek Costpoint group at Redstone GCI if you are considering any structural changes to your accounting system.
Closing the Fiscal Year
Timing
You can begin to process transactions for the next fiscal year as you move through the closing steps in the previous fiscal year. You should not begin the closing steps for the previous fiscal year until AFTER you have completed the month end close for the final accounting period.
Reconciliations
This includes income statements, balance sheets, cash flow statements, and project reports. When reviewing your trial balance make sure it is in balance. It is also crucial that you reconcile the general ledger to the project ledger. If the two are not in balance you risk contract to date costs being incorrect when the project ledger is rolled to the next fiscal year.
Closing Subsidiary Ledgers
Close subsidiary ledgers, such as accounts receivable, accounts payable, and the unbilled analysis to ensure that transactions from the previous fiscal year are accurately recorded. This includes reconciling the subsidiary ledger to the general ledger. If the two do not tie, you must reconcile and make the necessary corrections to get them back in balance. This step is crucial for maintaining the integrity of financial data.
Archiving and Backups
Perform comprehensive backups of your Costpoint data. Archiving historical data ensures that your organization maintains a record of previous fiscal years for reference and compliance purposes.
Best Practices for a Seamless Close
Communication and Training
Communicate the year-end closing plan to relevant personnel and provide training. This ensures that everyone is aligned and proficient in the required tasks.
Collaboration Across Departments
Collaborate between finance, accounting, contracts, subcontracts, project management, and other relevant departments. Clear communication and collaboration streamline the year-end process, ensuring a cohesive approach.
Documentation
Maintain thorough documentation of all year-end processes. Documenting the steps taken, adjustments made, and any challenges faced provides a valuable reference for future fiscal year closings.
Fiscal year-end processing in Deltek Costpoint is not just a routine task; it's a strategic initiative to set the stage for success in the upcoming fiscal year. By following the outlined steps for General Ledger and Projects, adhering to best practices, and leveraging the capabilities of Deltek Costpoint, you can navigate the year-end close with confidence, ensuring accuracy, compliance, and a solid foundation for continued financial stability.
How Can Redstone GCI Help?
If you would like assistance or a comprehensive fiscal year-end processing checklist, please reach out to one of our Deltek Costpoint consultants here at Redstone Government Consulting, Inc.
Heather joined Redstone Government Consulting, Inc. in December of 2017 as a Consultant. Her areas of expertise include supporting government contractors in the implementation and operation of Costpoint, assisting with employee training and providing outsourced accounting services, including general ledger, unbilled analysis, reconciliation, accounts payable, accounts receivable, payroll, and payroll taxes. Heather specializes in best accounting practices, from setup and training to monthly processing. Heather has over 17 years’ experience in government contracting, supporting a wide range of contract types and customers. Her areas of expertise include program control, financial analysis and forecasting, government cost accounting, and procurement. Heather’s hands-on technical experience in all aspects of the business department provides a unique set of expertise for our clients. Heather has led numerous Costpoint implementations and re-implementations for the Accounting and Projects modules. She has worked directly with our clients to design accounting systems that are meaningful and useful for each individual client. Heather also assists contractors with the implementation of the new Subcontractor module and Budget & Planning module within Costpoint. She provides training in these modules and has developed desktop procedures that allow for a quick and seamless transition and implementation of both modules. Heather is Costpoint certified in Billing & Accounts Receivable, Accounts Payable, Projects, General Ledger, and the Master Costpoint Certification. Heather graduated with a Bachelor of Science Degree in Financial Management and a minor in Economics from the University of Alabama in 2006.