Sometimes the end is a good thing because it wipes out the old and makes room for the new. In a few weeks, we celebrate New year and have a good time with our loved ones. Those in charge of core banking systems often observe how their EOY processing is going during new years eve. I am hoping that all Core Banking teams will have a hassle-free night. You should read this post if you are curious about this necessary processing.
In T24, closing profit and loss accounts refer to the so-called "yearend" processing and must be completed on the first day of the new year. Banks usually introduce freeze periods of no changes in their critical systems during this yearend processing to ensure that this crucial processing goes well.
Profit and Loss closeout
The Profit and Loss closeout process are where the previous year's PL is moved to Asset & Liability during the first working day of the new financial year. Profit and Loss close out End of Day job needs to be triggered on the first working day of the new financial year. Therefore, the PL of the previous year is moved to Asset & Liability (PL CLOSE Internal Account) during the first working day of the new financial year.
Profit and Loss Close Out Account
It is mandatory to have an individual internal local currency account for the PL Close Out category and the POSITION TYPE (TR) defined in the ACCOUNT.CLASS for all LEAD and BRANCH companies. If the respective internal account does not exist, the system gets fatal. Therefore, ensure the internal account is created before proceeding the yearend COB.
Start of year jobs
The job should only be run if there are savings accounts. This is an end-of-day job, runs at the START of the year to move the open cleared balance to the start of the year balance field in the account records, and runs as the first 'financial' job during the start of the day.
If the POST.CLOSING module is installed, and if the POST.CLOSING module is in use, then create PC.PERIOD record for the date in the PERIOD.END.DATE field of the DATES record on the last working day. This has to be created for all the companies.
PROCESSING.DATE and LAST.RUN.DATE
Generally, the yearend procedure to move the previous year's PL (Profit & Loss) to an AL(Asset & Liability) account occurs on the first working day of the new financial year.
Actual Year End
In T24, the PROFIT&LOSS (P&L) of the last financial year will get moved to the Asset liability (A&L) only after running the first working day's COB of the new financial yearend. This is done as the first JOB (PL.MOVE.TO.AL in the application stage) of the Batch Processing so as to move all the PL entries till the previous working day to the PL CLOSE account. Therefore check for the PL closeout entries after completing the first working day COB of the new financial year.
FINANCIAL.YEAR.END cycle after EOY cob
The field FINANCIAL.YEAR.END will be updated in the company records after the end of the batch job of the PL.CLOSE.OUT.FINISH during the first cob of the financial year.
Yearend process on Holiday
If the requirement is to run the yearend process on the first day of the new year, then the first day needs to be set as a working day. This will not have any impacts during and after the yearend process.PL balances will be closed on the first working day COB.
Netting entries formed in STMT.ENTRY
During PL Year End closing, the system will generate entries with processing date ending with CL which is a standard functionality.
COB ERRORS During EOY
MISSING ACCOUNT Error
An internal account has to be created for the category to avoid MISSING
Change the halt parameter in PL.CLOSE.PARAMETER to Yes.
The field CLOSE.HLT.PRESS in PL.CLOSE.PARAMETER is a flag that allows the cob process to be halted just after the closeout process is run. This allows the users to access reports or files to extract key financial data they require pertaining to the yearend. If left unchecked, the process will run without halting. Once the report was taken, kindly continue the COB.
I am hoping that everyone has a peaceful new years eve without EOY troubleshooting and debugging sessions.
Keep up the great work! Happy Performance Engineering!