NetSuite – Closing Accounting Periods

Hello again from WAC Solution Partners! We are back with a two-part blog about closing accounting periods in NetSuite. In this first part, we will cover how to close a period, and in part two, we will cover how to reopen and edit a closed period.

So what is closing a period and why would you want to do it?

In most software packages, “closing” a period means roughly the same thing, but they do differ slightly. With some packages it may be a simple process, and in some packages it may be complex.

In NetSuite, closing a period changes its status from “Open” to “Closed” and locks it so that no transactions can be posted to any date within the period by anyone (including administrators). It also prevents editing. For these reasons, closing a period should only be done after all posting to a period is complete. It should also only be performed after review and reconciliation to ensure correctness and balance.

For some companies this is a simple procedure and for some it is complex. However, no matter what the size, closing in NetSuite is relatively simple compared to many other software packages.

NetSuite gives you a “Period Close Checklist” to walk you through the closing procedure. Its contents are affected by what modules and features you have active in your system. For instance, Multi-Currency would add a step to the list regarding currency evaluation.

1. Let’s see how to close a period.

a. Go to Setup>Accounting>Manage Accounting Periods

b. The Manage Accounting Periods page allows you to close and open periods, or to set up new fiscal calendars. Closed periods will be marked with a green check under “Period Close” and will display a locked icon to indicate that AP, AR, and GL are all locked.

Open periods will not have a check and transactions will appear unlocked. Because periods are closed sequentially, this means that any checked period before the latest checked period is closed.

c. The first step in closing the period is to click on the checklist.

d. This brings you to the checklist for that period. Please note that because we are using a demo environment and reopening previous periods for demonstration purposes, the status is listed as “Reopened”.

e. Begin clicking through the items on the checklist. The first item, Lock A/R will bring you to this page.

f. Check the boxes and hit “Submit” to save your work. This locks AR for the checked companies for the selected period. Note that our demo company has multiple subsidiaries. If you only have one entity in your system, you will only see that entity.

g. You will be sent back to the checklist. A/R will now be marked as locked.

h. You may then close the items listed before “Close” in any order you like. However, certain items may have prerequisites that need to be completed before they may be closed. These items are greyed out, and hovering over them with your cursor will tell you what needs to be done in order to close them.

i. Lock All” is a misnomer, as it actually means the GL.
j. “Resolve Date/Period Mismatches” allows you to correct transactions that are dated wrong. For instance, if an invoice is posted to the wrong month. Clicking this will cause NetSuite to look for mismatches in the transactions for the period. You can then click the Edit links to resolve these discrepancies.

k. Note that when you create transactions, those transactions will not automatically post to the proper period if that period is not set up in a fiscal calendar. This means that if you are trying to post in 2018 but have not created any 2018 periods in NetSuite, then the transactions will post in the wrong period.

l. The final step is to click “Close” at the end.

m. After this, click “Close Period”.

n. The period is now closed.

o. If you go back to the main list, you will see the closure reflected there, as well.

As you can see, NetSuite makes closing periods a fairly simple task and offers several tools with which to manage them.

Please read our next blog on reopening accounting periods and the use of the “Quick Close” routine.

We hope that this blog was useful to you. If you have any questions about closing periods or any other NetSuite topic, please contact us by Clicking Here!

 

 

Sage 100 ERP (MAS 90): How to Create a Receipt of Goods Entry

Question: We own Sage 100 ERP (formerly Sage MAS90), we just added the Purchase Order and Inventory Management Modules. After we issue a Purchase Order and the goods are received, how do we make the Receipt of Goods Entry?

Answer: First, you will need to go to Modules > Purchase Order>Main>Receipt of Goods Entry. You will select a new entry by clicking on the # sign next to the Receipt number. Then you should select or type in the PO number.

Sage 100 ERP Purchase Order Blog resized 600

Second, if you have received the invoice with the shipment it can be entered into the Invoice number box, if not and you received the invoice at a later date you can then us Receipt of Invoice task at a later date.

Third, select the lines tab, the system will ask if you want to receive the entire order:

Sage 100 ERP Purchase Order 2 resized 600

Select yes if you have received the entire order, select no if you have received a partial shipment and would like to leave the Purchase order open.

Sage 100 ERP Purchase Order 3 resized 600

Fourth, we selected yes in the example. Quantities can also be adjusted at this point. If you have Lot or Serial Number inventory items they will show as a yellow ! at the left of the item code and they must distributed using the Lot/Serial Distribution icon that is shaped like a grid.

Sage 100 ERP Purchase Order 4 resized 600

Fifth, once all distributions are made Accept and run the Daily Receipt Register and Update, this will adjust the Inventory quantities and be available for business use.

Sage 100 ERP Purchase Order 5 resized 600

 

New Tax Law Changes for 2018

By now we are all aware that there are new tax tables coming due to tax reform. While most everyone will see a difference in their paycheck by February 15, there are still some details that aren’t quite ready. As the tax law is written, there will be no personal exemptions for 2018. So, what are we supposed to do with those W-4 forms that we have from our employees?

The IRS recently released a notice with additional information regarding those W-4 forms. The notice extends the effective period of the current Forms W-4 until February 28, 2018 and does the following:

• Temporarily suspends the requirement that employees must furnish their employers new Forms W-4 within 10
of changes in status that reduce the withholding allowances they are entitled to claim;
• Extends the use of the 2017 W-4 Form until the 2018 W-4 Form is available;
• Provides that the withholding rate on supplemental wage payments is 22 percent for 2018 through 2025; and
• Provides that, for 2018, withholding on periodic payments when no withholding certificate is in effect is
based on treating the payee as a married individual claiming three withholding allowances.

Basically, it is going to take the IRS quite some time to redesign the W-4 so it reflects the changes in the new tax law, so to minimize the burden on employees and employers, the IRS and the Treasury Department designed the 2018 withholding tables to work with the Forms W-4 that employees have already furnished their employers. Once the newly designed 2018 Form W-4 is released employees will have 30 days to submit the new forms to their employers.

Costly Ghosts and Zombies in Your Business

Costly Ghosts and Zombies in Your Business
by Gary Maher, Sage Partner Account Manager

October is a great month to do something about your Ghost and Zombie Assets. After all what’s scarier than a ghost and zombie other than a ghost and zombie that are stealing money from you?

Okay, well maybe they are not stealing it, but they are costing you money you don’t need to spend (or will cost you money). So what makes them this frightening?

“Ghost Assets” are those assets that are currently on your books, but are no longer in service. Think of items that have been disposed of, misplaced, lost, stolen or damaged as some of the most popular Ghost Assets that are nowhere to be found in your actual inventory. You threw that computer or phone away but “Boo” they are still on the books.

These can be quite prevalent in most organizations as the average company’s inventory is comprised of 15%-30% ghost assets. For example, if you have $2 million in depreciable fixed assets and 15% of that is ghost assets (taking the low end of the range), then you are listing $300,000 in assets that don’t exist. Again, assuming average tax rates and depreciation, these ghost assets are costing your organization more than $50,000 in tax overpayments each year! Those are expensive ghosts! Of course, eliminating them may make you feel like a superhero.

On the opposite side, are the “Zombie Assets”. A zombie asset can be found during your physical audit, however it is nowhere to be found on the fixed assets register. Tracking these zombie assets brings value back to your company and protects you from fines for under reporting (think how scary an actual audit would be in this scenario). Generally, each company has Zombie Assets equal to 12% of their inventory just walking around lifeless. Thus in the value of ghosts vs. zombies, the ghosts win but they are both hurting your organization. In fact, utilizing the industry averages it may be frightening to realize that almost 40% or more of your organization’s assets can be classified this way.

So how can you ensure you are compliance but not paying more than you owe?

Automation is the key. Spreadsheets and manual methods won’t work beyond a few assets and help create ghosts and zombies by being inefficient. Automation tools, such as Sage Fixed Assets, enable more complete and organized physical audits, which are essential to knowing which assets are where. Of course, having better ongoing methods for tracking assets as they are added or disposed of helps as well.

In short, tools such as Sage Fixed Assets are smart investments and pay for themselves rapidly, not only in saved taxes and greater efficiencies (see for yourself with this easy to use ROI calculator: http://go.sage.com/SFA_ROICalculator), but in piece of mind. Here’s another scary fact, did you know there are over 300,000 GAAP and IRS rules and regulations for depreciation calculations? Sage Fixed Assets does, and keeps up with them for you protecting you from audit horror stories.

Whatever method you choose, make sure to make this Halloween a little less frightening by eliminating the ghost and zombie assets in your organization. For more information on how Sage Fixed Assets can help check https://www.sage.com/en-us/products/sage-fixed-assets/ or feel free to email me at gary.maher@sage.com.

Happy zombie hunting and ghost busting!

 

 

Sage 300 Over Applied Cash Receipts

Sage 300 allows a user to apply a payment to invoices for more than the amount of the payment.  A payment that is not fully applied, displays as a negative value on the A/R Aged Trial Balance.  A payment that is over applied, displays as a positive value.  Typically, this would not be an issue, however, the apply feature for credits and the entry of credit memos can only be used against invoices, and not against the over applied payments.

If the over applied payment is from a check receipt, the check can be reversed in Common Services – Bank Transactions – Reverse Transactions, but if the payment was received via credit card, through Sage Payment Solutions, that transaction cannot be reversed.

If the customers balance is correct, no action needs to be taken. When the next payment is received, it may be applied to that over payment record.  Only new payments can be applied against the over payment, and it can only be completed at the time payment is received.

If the balance is incorrect, a credit memo should be created, but it cannot be applied against the over applied payment.  The customer balance will be correct, but the aged receivables will show a credit balance and an equal over applied payment balance.  In order to clean up your records, a zero dollar receipt can be entered and applied to both the over applied payment and the credit memo.  This will remove both transactions from the A/R Aged Trial Balance.

If you have this problem, please feel free to contact me at Michael.Ericksen@wacptrs.com.

5 Ways to Increase Social Media Engagement

 

Social Media Engagement is basically getting your audience to do something in response to a post such as; “Like,” comment, click a photo/link or share a post. There are many ways to increase Social Media Engagement and I have listed 5 below.

1) Ask Questions- People love to share their opinions, so post some questions and watch the comments come in.

2) Humor- Everyone loves a good laugh so share a funny meme, quote or gif. This will help people relate to your organization.

3) Inspiring Memes or Quotes- Take a good quote, create simple artwork online to make it visually appealing and share.

4) Trivia- Lively and interesting trivia will help get people to engage more with your organization. Especially if there is a prize involved!

5) Customer Service- Social Media is an extension of your customer service. It’s a place where if you’re looking, you can respond to comments, complaints or questions and help steer the direction of the conversations regarding an organization or industry.

Written by: Kristy Brooke

WAC Solution Partners-Midwest

Benford’s Law

Benford’s Law

I have been in accounting for forty years and I just recently learned about Benford’s Law.  This law states that the first digit of number is much more likely to be a low number rather than a high number.  In fact if a set of data was to conform exactly to the law it would break out like this:

Mike E 1

 

Of course the first digit cannot be zero.  This can be very useful in reviewing expense accounts or any set of data that you feel is not correct.  Indeed, there are many instances where this law does not apply, but it is remarkably accurate when the data can truly be any numbers.  One test I saw was the population of all the countries in the world.  Here is how that came out:

Mike E 2

 

It is amazing that it is so close to the prediction from Benford’s law.   You can go to www.testingbenfordslaw.com to see many more lists and how they conform to the law.  Remember the data must be random and not a data set where number are assigned sequentially, influenced by human thought, have built in minimums and maximums, etc.

I decided to test the law with a data set from my company.  Below is my date for all the checks written by my company from January 1 – April 15, 2017.

Mike E 3

Again look at how the checks starting with a 1 or 2 are much more than checks starting was an 8 or 9. Given the limitations, there are still a great number of instances where this will work.  If you think any set of data is not correct, you can use it to help detect fraud.

Written by Michael Ericksen

WAC Solution Partners- Midwest

847-605-1590

Baby Boomers & Gen X, Data Changes, Do You?

In his book, The Age Curve, Kenneth W. Gronbach describes how many businesses made bad decisions because they expected the future to be just like the past.   Gronbach is a demographer and explains how many Gen X -ers have views that are distorted or just plain wrong.

Gen X is 11% smaller than the Baby Boomer Generation. Many statistics about Gen X show how they generally participate less in just about everything than Baby Boomer generation without taking into account that there are less of them!  In many instances the Gen X’ers participate at the same percentage as the Baby Boomers, but it is hard to notice because of the size difference.

The Age Curve points out that you need to be aware of your target market, which is fluid, not fixed. If you or your company have been marketing to Baby Boomers, your market is shrinking because Gen X is smaller.  Another interesting point is that because Gen X is smaller, they act differently in that they are choosier about their jobs. They don’t have to take a position with a lot of travel if that doesn’t appeal to them. Many industries that build up to serve the Boomers will have trouble since there are not enough Gen X’ers to replace those customers.

With this in mind, what assumptions do you make about your business? Do you have the data to make the correct decisions? This is where we can help you! If you need better systems and better access to you data, then give us a call!

Written by Michael Ericksen, WAC Solution Partners- Midwest

Avoid Ransomware- Remove Former Users

Last year our company was hit by a ransomware virus and it took us about two days to recover.  We thought we were well protected with our anti-virus program and other protective measures.  After we restored everything, double checked our virus protection and changed all our passwords we were hit again and lost another two days of productivity.  We found out the virus was not coming in via a website or email, but by someone logging in directly to our server and running the program.  We had not removed an old user and that was the user name and password being used to damage our data.

Last month we had to help one of our clients because they were hit by a virus.  They went through a similar procedure and when I was helping them, I shared my story.  Sure enough the next week they were hit again.  It did not come from where they thought it came from, but from an old workstation that no one uses, but was still connected to the server.  The hackers found that computer and from there they were able to cause major damage.

I am sharing these stories to help protect you from a similar incident.  Please, when people leave your company, remove their user names from your system so you will not be the next victim of ransomware.

Written by Michael Ericksen, WAC Solution Partners- Midwest

Sink or swim: A guide to surviving sales tax in 2017

Businesses may feel out of their depth as states look to test the waters on tax compliance in the coming year

Sales and use tax compliance can be a complex problem for many businesses. It almost feels like you need a bowie knife to cut through the regulatory red tape, although knowledge may be a better weapon in this case. So stay sharp with Avalara’s 2017 Sales Tax Survival Guide.

Published every year to help businesses better understand the challenges they are up against when it comes to complying with sales and use tax regulations in the U.S., Avalara’s latest Survival Guide is refreshed for 2017 with insight into what’s new and what’s changed at the state and federal level, common challenges around sales tax compliance, and tips for staying on top of your tax obligations.

States are testing the waters in 2017

States are facing budget deficits and they need revenue from taxes. Sales and use tax is one of the largest generators of this revenue, but collecting it has become more difficult as how Americans buy, sell and consume goods and services has evolved beyond what’s defined by state tax laws. For example, Congress has yet to act on outdated federal internet sales legislation; services now outpace goods in consumer spending but aren’t taxed with the same consistency; and digital delivery of software, books and other media and streaming services have states perplexed when it comes to setting standards for taxability.

This has led many states to get aggressive – hiring more auditors, expanding nexus definitions (a connection with a state that triggers an obligation to collect and remit sales tax to that state) to target out of state sellers, implementing use tax reporting policies, increasing state and local sales tax rates, and extending sales tax to more products and services.

Survival of the fittest

While not every aspect of managing transactional tax causes pain for every business, it’s pretty certain that at least some areas will pose a challenge given how quickly the rules changes.

The 2017 Sales Tax Survival Guide walks you through 10 critical compliance challenges, from determining nexus to managing exempt sales to understanding the implications of drop shipping on your business and dealing with audits and lawsuits. Each section is also buoyed with best practices for overcoming these challenges, and links to addition information should you need to go more in depth on a topic.

It’s a must-read reference for anyone who is responsible for tax compliance in their business. And it’s available for download here.

Shore up compliance

As helpful as it is, no guide is a replacement for good practices. The most valuable takeaway from the Survival Guide is a greater awareness of just how burdensome tax compliance can be on a business – large or small. Trying to keep up with ever-changing state tax rates and rules puts a strain on accounting and finance teams in terms of the research and due diligence required.

You can remove that burden with tax automation software like Avalara AvaTax. Much of the work that goes into proving sales and use tax compliance – calculating tax rates, verifying customer information, updating taxability rules, applying exemptions, remitting sales tax and even filing tax returns – can be handled easily and efficiently in your accounting system with little to no manual work required. It’s easy to set up and use, guaranteed accurate, and budget friendly. Avalara is a preferred provider of tax software for more than 500 ecommerce, shopping cart, ERP and accounting systems and used by more than 20,000 companies worldwide. Talk to your system or application provider about using AvaTax to manage transactional tax.

READ NOW

Permission to reprint or repost given by Avalara. Content previously published at www.avalara.com/blog.