FAQ - Closing Calendar Year End

ROUGHNECK REMINDERS

You should not Update for Payroll Checks for a New Year prior to zeroing W2 values.

You should not Update January Operating Statements prior to zeroing owner 1099 values.

You should not enter or pay Accounts Payable invoices prior to zeroing vendor year to date values.

If you have more than one company you must close the Calendar Year for each company.

DO NOT PERFORM ANY OF THE FOLLOWING FOR A NEW YEAR BEFORE YOU EXECUTE YEAR-END PROCEDURES:

Do not close any period for a New Year - This will distort year to date values.

Do not update Operating Statements and checks. This will distort owner 1099 year to date values.

Do not post payments or applications to vendor invoices, nor update for computer printed checks for Accounts Payable. This will distort Vendor 1099 year to date values.

Do not update for Payroll. This will distort Employee W-2 year to date values.

WHAT IS THE DIFFERENCE BETWEEN CALENDAR AND FISCAL YEAR END?

The Calendar Year ends on December 31, and pertains to 1099's and W2's and not your Company's Chart of Accounts. A Fiscal Year ends whenever your tax accounting year ends and pertains to your Company Chart of Accounts. Some companies have tax accounting years that end on dates other than December 31. If your company's books do not close in December such as March, June or September, your general ledger is a Fiscal Year end. The Fiscal Year end is your company's 12-month accounting period when the company files corporate tax returns.

DO I NEED TO CLOSE THE MONTH OF DECEMBER BEFORE I CLOSE THE CALENDAR YEAR?

Yes, otherwise December will not be included in the year end totals, if your year closes in December.

WHAT HAPPENS WHEN I CLOSE THE CALENDAR AND/OR FISCAL YEAR END?

When you close the Calendar Year End you are zeroing year to date values for the employee payroll (W2’s), Owner and Vendor files (1099’s). When closing the Fiscal Year you are zeroing the year to date values for the Company Chart of Accounts, Unit Chart of Accounts and the Land Management programs.

WHAT ACCOUNTS ARE ZEROED FOR FISCAL YEAR CLOSING?

See Zero Fiscal YTD Values.

WHAT ACCOUNTS ARE ZEROED FOR CALENDAR YEAR CLOSING?

See Zero Calendar YTD Values.

WHAT DO I DO IF I HAVE JANUARY PAYROLL AND I HAVEN’T RECEIVED MY ENHANCEMENTS FOR THE NEW PAYROLL TAX TABLE?

The Circular E booklet contains the payroll tax table for the New Year and you can use it to Edit the Payroll Tax Table. Be sure to use the Annual tax table for single and married payroll. If you do not have the new tax table, using the old tax table will not make a significant difference in tax withheld for one or two pay periods. You can call Roughneck and we will fax you a copy or you can check out our website at www.ruff.com to download it.

CAN I PRINT PAYROLL CHECKS FOR JANUARY BEFORE ZEROING THE W2’S AND PRINTING PAYROLL YEAR-END REPORTS?

You can print payroll checks for a New Year one time prior to zeroing values for the payroll quarter and year to date W2’s, provided you do not Update the payroll for the New Year.

DO I HAVE TO CLOSE THE PAYROLL QUARTER VALUES BEFORE ENTERING HOURS FOR JANUARY?

You must clear the quarter and W2 values before updating payroll for a New Year. If you do not clear prior 4th quarter values and (YTD) W2 values, the 1st quarter values would be incorrect when payroll is Updated for a new quarter.

DO I NEED TO CLOSE THE MONTH OF DECEMBER BEFORE I ZERO THE COMPANY CHART OF ACCOUNTS VALUES AND UNIT CHART OF ACCOUNTS VALUES FOR THE FISCAL YEAR END?

Yes, if your fiscal year ends in December. If you do not close transactions for December you will only have values as of last close which was November. Closing transactions for December will reflect 12 months of transactions when you zero your Fiscal Year.

IF DECEMBER REVENUE IS NOT RECEIVED UNTIL JANUARY - WHAT SHOULD I DO?

December production should be booked when you receive it in January, therefore 1099's should be printed and cleared prior to processing December's production in January. It is next year's revenue and 1099's for next year.

IF MY COMPANY CLOSED IN DECEMBER - WHAT SHOULD I DO?

You must close the Calendar Year and the Fiscal Year.

CAN I ENTER TRANSACTIONS AND INVOICES FOR A NEW YEAR BEFORE EXECUTING YEAR-END PROCEDURES?

Yes, unless you use the year to date purchase fields in the Vendor file. That field is updated when you enter invoices. The field is not used in any inquiry or year-end reports, but some operators like to look at it to see how much they have bought from a vendor for the year. The field is zeroed during year-end procedures.

CAN I MAKE OR POST PAYMENTS TO VENDOR TO VENDOR INVOICES BEFORE EXECUTING YEAR-END PROCEDURE?

You can manually hand-write payments to vendors for a New Year, but you cannot post them. Posting payments updates vendor 1099 year to date values of the Vendor file. You can print computer-generated checks to vendors, but don't update - same reason as above.

CAN I PRINT OPERATING STATEMENTS AND CHECKS FOR NEW YEAR BEFORE EXECUTING YEAR-END PROCEDURE?

Yes, but don't update because updating adds to the owner year to date 1099 values in the DOI file. You can print Operating Statements and checks for a New Year without updating, then after executing year-end procedures, go run the update for the Operating Statements.

If you need to print more than one set of statements for a new year use the procedure below.

1. Print Operating Statements and checks, in the normal manner.

2. Copy each temporary update file (REVTOTAL and REVSTUB) to another file, in your data directory.

For Example:

Copy REVTOTAL.DBF to RTOTAL1.DBF

Copy REVSTUB.DBF to RSTUB1.DBF

Now, you can print Operating Statements and checks. When you start the Operating Statement program, you will be flagged that you have not updated. That's O.K., let Roughneck remove the update data (you made a copy of it above) and print statements and checks again. Repeat Steps 1 and 2 for each additional set of statements but copy to RTOTAL2.DBF and RSTUB2.DBF, etc...

To Update for Operating Statements after executing Year-End procedures,

Copy both Temp. Storage files back;

Copy RTOTAL1.DBF to REVTOTAL.DBF

Copy RSTUB1.DBF to REVSTUB.DBF

Now you are ready to run the Operating Statement update.

CAN I RUN PAYROLL FOR NEW YEAR BEFORE EXECUTING YEAR-END PROCEDURES?

Yes, provided you don't update for the payroll until after executing year-end procedures.

CAN I CLOSE THE MONTH OF DECEMBER TWICE?

You can close December twice if you need to make adjusting entries. Make sure when you are closing December for the second time you answer “Yes” to the question “Have you closed this period before?” If you answer “No”, then your last close reports will only reflect what you closed the second time.

CAN I PRINT OPERATING STATEMENTS & CHECKS FOR JANUARY BEFORE CLOSING THE MONTH OF DECEMBER OR CLOSING THE YEAR?

Yes, but DO NOT UPDATE. Updating adds to the owner year to date 1099 values in the DOI file. You can print Operating Statements and checks for a New Year without updating, then after executing Calendar Year Close Reports and zeroing values for Calendar Year, run the update for the Operating Statements for January.

CAN I PRINT OPERATING STATEMENTS AND CHECKS FOR JANUARY BEFORE I HAVE ZEROED 1099’S FOR OWNERS?

Yes, you can print your Operating Statements and checks but you can not update them until you have zeroed out your owner 1099’s in the Calendar Year Zero Values.

I POSTED REVENUE USING TRANSACTION DATES OF DECEMBER BUT THIS IS OCTOBER PRODUCTION. WHEN DO I PRINT 1099’S?

Once you have printed and updated your December Operating Statements you are ready to print 1099 reports and forms.

I DO NOT GET REVENUE FOR DECEMBER PRODUCTION UNTIL THE NEXT YEAR. WILL MY 1099’S BE CORRECT WITHOUT DECEMBER PRODUCTION REVENUE POSTED?

December production should be booked when you receive it in January, therefore 1099’s should be printed and cleared prior to processing December's production in January. Checks printed and updated with January transaction dates are 1099 values for the next year.

CAN I ENTER ACCOUNTS PAYABLE INVOICES FOR JANUARY WHEN I HAVEN’T ZEROED 1099’S FOR VENDORS?

Yes, unless you use the year to date purchase field of the Vendor file. That field is updated when you enter Accounts Payable invoices. The field is not used in any inquiry or year-end reports. Some operators print the Vendor file report to see how much they have purchased from the vendor. The vendor year to date purchased field and 1099 service and rental values are zeroed in the Calendar Year Zero Values procedure.

CAN I POST MANUAL PAYMENTS TO ACCOUNTS PAYABLE INVOICES OR PRINT CHECKS FOR JANUARY BEFORE I ZERO 1099’S FOR VENDOR’S?

DO NOT post any manual payments until you have zeroed 1099 values. You can print the computer checks, just do not update them. You will be given the option to update computer checks if you have not zeroed vendor 1099 values.

CAN I PRINT OPERATING STATEMENTS AND CHECKS FOR JANUARY BEFORE I HAVE ZEROED 1099’S FOR OWNERS?

Yes, but DO NOT UPDATE January Operating Statements. Updating Operating Statements adds 1099 values to the gross revenue, tax released and total expenses in the DOI file. After 1099 values have been zeroed, you can update the January Operating Statements and checks.

HOW DO I MAKE ADJUSTING JOURNAL ENTRIES?

You should make adjusting journal entries in the Transaction file using Enter Journal Entry. Close the period for the transaction dates representing the adjustments. Proceed with printing the Fiscal Year Close Reports, which include any adjusting journal entries made prior to zeroing year to date values for your Fiscal Year.

IF I DO NOT GET THE ADJUSTING JOURNAL ENTRIES FROM MY ACCOUNTANT UNTIL MARCH OR APRIL CAN I CLOSE THE FISCAL YEAR END?

No! You cannot close transactions for January, February, March or April if adjusting journal entries need to be made for the December Fiscal Year. Make adjusting entries using a transaction date of 12-31-2004. Close the period again for adjusting entries dated 12-31-2004. Proceed with Fiscal Year Close Reports and instructions prior to zeroing values for Fiscal Year. Then close each period transaction for January, February, March and April.

WHAT IF OUR TAX ACCOUNTING YEAR ENDS IN MARCH?

Close only the Fiscal Year at that time and close the Calendar Year in December. As above do not close any transactions after March until all adjusting entries have been made for your Fiscal Year and values have been zeroed for your Fiscal Year.

WHEN POSTING BALANCE FORWARDS FOR THE NEW YEAR WHICH GENERAL LEDGER ACCOUNTS ARE USED?

Only assets (10xxx), liabilities (20xxx) and retained earnings, general ledger number 25300 are posted as balance forwards to the Year to Date Transaction file. The Year to Date Transaction file is the supporting document for the Company Chart of Accounts file.

WHEN SHOULD I ZERO VALUES FOR LAND MANAGEMENT AND UNIT CHART OF ACCOUNTS AT CALENDAR OR FISCAL YEAR-END?

Most operators zero values for Land Management and the Unit Chart of Accounts when their tax accounting year ends at Fiscal Year-end.

CAN I PRINT MY UNIT P & L FOR THE END OF THE YEAR IF I HAVE ALREADY ZEROED THE UNIT CHART OF ACCOUNTS?

No. You need to print Unit P & L’s before zeroing year to date values for the Unit Chart of Accounts. Life to date values (LTD) are not zeroed.

1099's and W-2's

WHEN SHOULD I PRINT 1099 REPORTS OR FORMS FOR OWNERS OR VENDORS?

After December Operating Statements and transactions for December have been updated.

WHEN DO I NEED TO PRINT W2’S?

When the last payroll checks are updated with transaction dates of December.

DO I HAVE TO RELEASE EVERYONE FROM MINIMUM WITHHOLD TO PRINT 1099's?

No, if you don't release the money in minimum withhold the amount will stay there until they do meet the minimum. We do suggest that you release everyone's minimum withhold amounts so you can send Investor's a 1099 for all revenue earned that is in minimum withhold. Refer to the Statement Summary and Operating Statements section in Manual for instructions on releasing amounts.

WHEN SHOULD I PRINT 1099's?

After all transactions dated December have been updated for Operating Statements.

CAN I PRINT A SUBSTITUTE FOR 1099-MISC FORM?

You need to contact the IRS to find out the regulations to see if you are qualified to send substitute 1099-MISC forms. Operators that have to file 1099's on Magnetic Media (250 or more 1099's) usually send a substitute 1099-MISC form to owners, they can't send paper 1099 forms if you exceed 250 1099 forms.

CAN I PRINT A 1099 FOR JUST VENDORS OR JUST OWNERS?

Yes, you can. If you want to print a 1099 for only vendors then you need to enter for a beginning owner number as 99999 and a ending owner number as 99999. You also need to specify the minimums as 99999999 amounts and this will allow you to print only a Vendor 1099. The same goes if you are only wanting to print 1099's for just the owners you need to follow the same steps, but put the 99999's in the vendor numbers.

CAN I PRINT 1099's IF I HAVE NOT CLOSED DECEMBER?

Yes, 1099's read from the Division of Interest file. Make sure you have updated Operating Statements for December prior to printing 1099's.

WHAT IF I DON’T HAVE THE W2 FORMS, BUT I HAVE PAYROLL THE FIRST WEEK OF JANUARY?

You can print payroll checks for a New Year one time prior to zeroing values for the old year, provided you do not update the payroll for the New Year.

WHAT SHOULD I DO IF I HAVE NOT RECEIVED OUR 1099 FORMS?

You need to back up your current data after printing and updating December’s Operating Statements so you can close the Calendar Year for 1099 values. After you receive the forms you can back up from where you are then, restore the first backup you had made prior to zeroing 1099 values. Print 1099’s and then restore the backup of your current data.

CAN I PRINT THE 1099 REPORTS/FORMS IF I HAVE NOT CLOSED THE MONTH FOR DECEMBER?

Yes, 1099 values for owners are read from the Division Of Interest file. Make sure you have updated Operating Statements for December prior to printing 1099's. Vendor 1099 values are read from the Vendor file.

HOW MANY TIMES CAN I PRINT THE 1099 REPORTS OR FORMS FOR THE OWNERS OR VENDORS?

You can print the 1099 reports or forms as many times as you need to provided you have not zeroed 1099 values.

CAN I PRINT A 1099 FOR ONLY ALL VENDORS OR FOR ONLY OWNERS?

Yes, you can specify to print for only vendors or owners on the 1099 report filter.

CAN I PRINT A SUBSTITUE 1099-MISC. FORM FOR OWNERS?

You need to contact the IRS to find out the regulations to see if you are qualified to send a substitute for the 1099-MISC. forms.

MINIMUM CHECK WITHHOLDING

DO I HAVE TO RELEASE EVERYONE FROM MINIMUM CHECK WITHHOLDING AT THE END OF THE YEAR?

No, but we recommend releasing all minimum check withheld amounts, as the WHDINFO file can be very large if carried over for another year. We recommend printing withheld released amounts and dropping all minimum withholding at year-end. Refer to ‘Statement Summary’ and ‘Operating Statements’ in manual for instructions on releasing minimum withhold amounts.

DO I HAVE TO RELEASE EVERYONE FROM MINIMUM WITHHOLD TO PRINT 1099's?

No.

ADJUSTING JOURNAL ENTRIES

HOW DO I MAKE ADJUSTING JOURNAL ENTRIES?

HOW DO I MAKE ADJUSTING JOURNAL ENTRIES FROM MY ACCOUNTANT, SINCE HE WON'T GIVE THEM TO ME UNTIL AFTER I CLOSE THE YEAR?

Be sure to make a backup of your data prior to closing the year. Then close the year and go ahead with the New Year, processing normally. When the accountant gives you the adjustments, you should do the following:

1. Make a backup of your data at your current position.

2. Restore the backup you made prior to closing the year.

3. Make the adjusting journal entries using the Transaction file and print all reports he requires.

4. Make another backup of the adjusted year-end data and store it.

5. Restore your data from the backup you made in Step 1, and make the same adjusting journal entries to it.

That is all. You now have last year and the New Year adjusted.

IF I DO NOT GET THE ADJUSTING JOURNAL ENTRIES FROM MY ACCOUNTANT UNTIL MARCH OR APRIL CAN I CLOSE THE FISCAL YEAR END?

WHAT IF OUR TAX ACCOUNTING YEAR ENDS IN MARCH?

OUR COMPANY’S BOOKS CLOSE IN DECEMBER, SHOULD I CLOSE THE CALENDAR AND THE FISCAL YEAR?

Yes, you should always close the Calendar Year and the month of December. If your company’s books close on December 31st also, then yes you should close both the Calendar and Fiscal Year.