This guide covers the month-end closing process and accounting reconciliation. 

CONTENTS

 

1. Check processes

Ensure that all sales invoices have been printed or sent. Use the extended search "Sales - Invoicing - Sales invoice list". Select "Invoice date", the month to be closed, and "Status" -> "Not sent" as search criteria.


Save the search for future months, check "Save changes", give the search a name, and finally press the "Save and search" button. The report can also be displayed in the homepage quick links widget.

If invoices appear in the result set, those invoices must be printed/sent to generate an accounting voucher for them.

Have all sales receipts for the month been recorded

Sales - Invoicing - Receipts and extended search.

Limit the search to the month to be closed and look for "Unprocessed" receipts.


Unprocessed receipts must be processed/matched to generate accounting vouchers for them.

Have all purchase invoices for the month been processed and posted

Purchases - Purchase invoices - Purchase invoice list

Limit the search by invoice date, for the period to be closed, select "Unposted" as the invoice status, and perform the search.

Unposted invoices must be posted to generate an accounting voucher for them. Please note the normal purchase invoice circulation here, i.e., if the invoice is new, it must be verified after posting, only then will a voucher be created. If you post a verified invoice, it must then be approved to create a voucher. If the invoice is approved, posting directly creates the voucher. If the invoice is approved and in "pre-posted" status, and there is no posting option visible on the invoice, the invoice must be returned to unprocessed and reposted and approved to create a voucher.

Have all payments for the month been processed

Purchases - Payments - Payment listing

Limit the report by the target month's dates and filter the view with the option "Show payments missing a voucher or invoice".


Have all bank statements for the month been processed

Financial management - Accounting - Bank statements

Select the year, month, and all accounts, then press the "Search bank statements" button.


Bank statement reconciliation is done in the bank statement view. The system compares the ending balance of the bank statement to the balance of the corresponding bank account in the accounting ledger as of the last day of the bank statement.

If the bank statement and the corresponding bank account in the accounting ledger match, the difference is zero euros.

If there is a difference between the bank statement and the accounting ledger balance, it is clearly shown in the Difference column.

Differences are found by taking the Financial management - Accounting - Voucher listing from the accounting and limiting the report to the corresponding bank account in the accounting ledger and the bank statement period. The result set is compared to the bank statement transactions, and incorrect transactions are corrected/added. If the bank statement is a weekly or monthly statement, transactions can also be limited by day, making it easier to find differences. The most common errors in entries are incorrect date, incorrect accounting account, or missing/duplicate entry.

2. Distinguishing vouchers

Open "Financial management - Accounting - Voucher listing". Limit the search to the month to be closed, and select "Show only distinguishing vouchers".


Vouchers shown in the listing are highlighted in red. Open the voucher by clicking the voucher number, then open the "Voucher-specific actions" button and select "Open in edit mode".

Make the necessary corrections to the voucher and save it. Note that if the voucher is dependent on accounts receivable/payable events or a bank statement, do not correct the amounts of incorrect accounts. If there is a cent difference on the voucher, use the rounding differences account for the correction.

3. Reconciliation

Open "Financial management - Accounting - Accounting reconciliation". 

The reconciliation view examines transactions in the accounting and accounts receivable/payable for the selected period. For accounting, the system's default accounts (Accounts Receivable and Accounts Payable) are used in the comparison. If accounts receivable/payable transactions have been recorded to accounts other than the default accounts, these will appear as differences between accounts receivable/payable and accounting.

Bank statements are not reconciled in this view, see point 1 above.

If there is a difference in the reconciliation view, it is usually due to the following factors:

  • The date (or posting date if given) and the date or amount of the SL voucher of the sales invoice differ
  • The date or amount of the sales receipt and its SR voucher differ
  • The posting date of the purchase invoice and the date or amount of its PL voucher differ
  • The date or amount of the purchase payment and its PP voucher differ
  • The sales invoice has no voucher
  • The sales receipt has no voucher
  • The purchase invoice has no voucher
  • The purchase payment has no voucher
  • There is a voucher in the accounting that uses the default accounts receivable or accounts payable account, but there is no corresponding accounts receivable/payable event (sales invoice, purchase invoice, receipt, payment)
  • The receipt is dated before the invoice posting date (the difference should disappear when the invoice posting date is passed)

Finding reconciliation differences

First, open the reconciliation view for the target month and check its opening balances for sales and purchases.


  • In the above image, both accounts receivable/payable have opening balance differences, and these must be resolved before the selected month can be reconciled
  • Open the reconciliation view backward month by month until you find the month where the difference originates. Find and correct the differences as described next.

In this example case, the opening balances of the reconciliation have been corrected, meaning the difference in the Opening Balance column for both accounts receivable/payable is 0.00 euros. However, the ending balance for sales differs from zero, meaning accounts receivable and accounting do not match. Since the opening balance is zero euros, the reconciliation difference must have occurred during the selected month. This information is clearly visible in the Change column, as the entire difference occurred during the selected month.


It is advisable to limit the reconciliation view to a slightly shorter period. For example, search for only one day at a time and find the difference with a smaller dataset.

If the difference is not within your selected period, it is advisable to change the limit to a daily basis by entering the desired day in both the start and end date fields and pressing the "Show report" button. At the top of the daily reconciliation view, there are links << previous day and next day >>, which allow you to move forward one day at a time until you find the distinguishing day.

If there is something in the reconciliation that the system sees as problematic, these exceptional vouchers and receipts are shown in the section. And here is the number of differences.
For the sales side, the view is like this, and you can drill down to the events from the links

  • Invoices without a voucher show invoices missing a voucher. These invoices lack a voucher, meaning the invoice has not been sent. Sending or printing the invoice creates a voucher for it. 
  • Vouchers not linked to an invoice or receipt show a possible voucher made manually to account 1701, which is not linked to an invoice or receipt. 
  • Difference in accounts receivable shows vouchers where the accounting accounts receivable account differs from the invoice amount. 
  • Difference in posting dates shows vouchers where the invoice posting date differs from the voucher date.
  • Difference in receipts shows if the receipt amount differs from the amount recorded in accounting.
  • Difference in receipt dates shows if the receipt date differs from the receipt voucher date.
  • Receipts without a voucher show receipts missing an accounting voucher. 


For the purchase ledger 

  • Invoices without a voucher show approved purchase invoices that have not been posted.
  • Vouchers not linked to an invoice or payment show vouchers, for example, manually posted to the accounts payable account, but there is no invoice for them. 
  • Difference in accounts payable shows if the accounts payable account entry differs from the invoice amount.
  • Difference in payments shows if the payment voucher amount differs from the paid amount.
  • Difference in payment dates shows if the payment date and payment voucher date differ.
  • Payment date is before the invoice date shows if a payment has been made before the invoice posting date. 
  • Payments without a voucher show if there are payments in the company missing a voucher in the background. 

From the sales and purchase ledger links, you can drill directly into the sales and purchase ledger listing, where you can quickly check if, for example, a sales or purchase invoice is missing a voucher.

The best way to reconcile in almost all cases is the so-called traditional model:

Sales invoices and receipts
(For reconciliation, the date and amount of the accounts receivable event must match the date and amount of the accounting event)

  • List all sales invoices and their SL vouchers for the distinguishing day, compare them (date and invoice total vs. accounts receivable account entry), and correct the differences
  • Check that each sales invoice for the distinguishing day has an SL voucher
  • List all receipts and their SR vouchers for the distinguishing day, compare them (date and receipt amount vs. accounts receivable account entry), and correct the differences
  • Check that each receipt for the distinguishing day has an SR voucher
  • Note receipts that are outside the accounts receivable, e.g., settlements from different financing companies, these are handled only in accounting
  • No accounting voucher is created for the allocation of a credit note, only two receipts in the accounts receivable
  • Use the accounting voucher listing to find all vouchers that have used the default accounts receivable account and check that no bypass entries have been made
  • Note that the reconciliation view compares accounts receivable only to the default accounts receivable account in accounting. If other receivable accounts are used, there may be a reconciliation difference equal to the balances of these other accounts.

Purchase invoices and payments
(For reconciliation, the date and amount of the accounts payable event must match the date and amount of the accounting event)

  • List all purchase invoices and their PL vouchers for the distinguishing day, compare them (date and invoice total vs. accounts payable account entry), and correct the differences
  • Check that each purchase invoice for the distinguishing day has a PL voucher
  • List all payments and their PP vouchers for the distinguishing day, compare them (date and payment amount vs. accounts payable account entry), and correct the differences
  • Check that each payment for the distinguishing day has a PP voucher
  • Use the accounting voucher listing to find all vouchers that have used the default accounts payable account and check that no bypass entries have been made
  • No accounting voucher is created for the allocation of a credit note, only two payments in the accounts payable
  • Note that the reconciliation view compares accounts payable only to the default accounts payable account in accounting. If other liability accounts are used, there may be a reconciliation difference equal to the balances of these other accounts.

4. Tracking items, open events, and event matching

There are separate guides for tracking items, open events, and event matching:

 

5. Accounting reports

Various accounting reports can be found in the menu options:
Financial management - Reporting and monitoring - Accounting reports
Financial management - Reporting and monitoring - Cost center reporting
Financial management - Reporting and monitoring - VAT reports

Financial management - Accounting - Financial statements


6. VAT summary declaration

Financial management - Company obligations - VAT summary declaration

The information for the report is retrieved from the accounting and accounts receivable/payable.

Customer card
Fields to note on the customer card are the customer's billing country and the Business ID field. The Business ID field is filled with the complete VAT number (VAT identifier) including the country code, the country code is not brought to the VAT summary declaration, as the country code is already obtained from the customer's billing country.

Product
There is only one field to note for the product in this regard, and that is the sales accounting account, which is found on the second tab of the product card, at the very bottom. The default accounting accounts and here the EU section:The account selected here can direct, for example, service sales to appear correctly on the VAT summary declaration. The account 3361 selected here has the VAT identifier EUPM 312 behind it in the chart of accounts:
In other words: The EU sales account guidance information defined in the product details affects how the sale is recorded. Whether it is a sale of goods or services. Triangular trade is handled with its own marking on the invoice itself.

Sales invoice
The tax treatment of the sales invoice must be "According to the customer's billing country group". If the trade is triangular trade, it must be marked on the invoice accordingly. The new invoice view:
The old invoice view:

Declaration
The information for the declaration is then retrieved from the accounting and accounts receivable/payable based on the customer and product card, as well as the markings on the invoice itself. An accounting voucher is essential; without it, no information will appear on the declaration.The "Retrieve values from accounting" button retrieves values for the declaration based on the information saved in the accounting. Sales are detailed by customer and trade item code (Goods sales, Triangular trade, and Service sales). If you wish, you can also fill in all the information yourself and then save the form as incomplete or marked as complete. You can add more rows by using the "Save form and show 10 new rows" button. Note: If you have already filled in the information manually, do not use the "Retrieve values from accounting" button again, as it will clear all manually entered information from the form.

When the declaration is marked as complete, go to the main view, select the declaration, and press the "Send selected declaration" button, then log in to Katso and finally send the declaration to the tax authority.

 

7. Period closing: VAT entry, OmaVero declaration, and payment

If the company is not VAT liable
If the company is not VAT liable, the months can be closed from the fiscal year management page. You can find our guide on the subject at the following link: Fiscal year management

Set the desired lock date in the VAT lock section and then press the Set lock button.

 

 Keywords: Month-end closing process, Sales invoices, Purchase invoices, Reconciliation, Accounting reports, Period closing

 

This article has been translated using an AI-based translation tool. The contents or wording of these instructions may differ from those in other instructions or in the software.


Did you find it helpful? Yes No

Send feedback
Sorry we couldn't be helpful. Help us improve this article with your feedback.