Problem: How to fix the Month End Closing Allocation error?
Solution:
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Month End Closing is a process used to automatically generate specific documents, verify and adjust the amounts of GL accounts Implement the appropriate Cost Allocation Methods.
Overview: The month-end closing process involves automatically generating specific documents and verifying and adjusting GL account balances at the end of the selected a period. This tool is also used to close essential for closing the financial year.
1. To To access Month End Closing document, go to Accounting > Service Tools > Month End Closing:
2. Once After opening the form opened, observe review and fill complete the required details before executing Mont End Closing process:
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running the month-end closing process.
Choose the appropriate entity if you are using Multi-Company Accounting
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. Set
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the desired year, which will be displayed at the center of the screen; you can use the right and left arrow
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buttons to
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adjust it.
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Then, select the month you want to process from the left column.
3. Once After selecting a month is selected, you can view will see which processes are available to run and which are not requiredneeded.
The A yellow triangle beside next to the month marks a month for which indicates that Month End Closing was either not performed completed successfully , or might be may require manual adjustments.
When it the triangle turns green, it means signifies that the month is has been successfully closed successfully.
4. You may receive an error during Month End Closing. There could be a various error.
Here we consider an error which appears due to Allocation Settings. During the month-end closing process, you may encounter various allocation errors. For example, an error might arise due to issues with Allocation Settings
This error appears when the Month End Closing cannot close the values based on occurs when the month-end closing process fails to finalize values according to the Allocation Settings.
Cost Allocation Methods are used utilized to allocate an distribute indirect and overhead cost costs to various cost centers, such as finish finished goods, work in progress, departmentdepartments, and business activities and so on.
The allocation source amount will be distributed between the business activities specified for the GL accounts intended for the financial results proportionally to the cost of goods sold, gross profit, sales volume, actual production cost associated with the business activities.
5. You may Please find Cost Allocation Methods and more information about it them in Accounting >Master Data > Cost Allocation Methods:
6. Here you find Find all the allocation methods and , the sources and its their allocations:
7. Go back Return to the error. It means there is not enough sales amount in this month indicates that this month’s sales are insufficient to cover the costcosts.
ThereforeConsequently, it the costs should be closed directly allocated to the Profit and Loss account.
8. To do adjust the settings, go navigate to Accounting > See also > Cost Allocation Settings.
Here, you will find a list of cost allocation settings for all account types. Now you need to open Locate the concern account , which has an errorwith the error, open it, and make the settingnecessary adjustments.
9. To check the account which that has an error, refer back to Month End Closing (it’s Depreciation of Fixed Assets).
Open this account from the Charts of Accounts: Accounting > See Also > Chart of Accounts.
Find and open require the required account and copy its section.
10. Go back to Cost Allocation Settings and find this section there and open the account type.
11. Enable an Choose the Account type and click on the copy option
12. The period should be the beginning of the month in which the error occurred. Enable the option ‘Close Directly to Profit and Loss’ and choose GL Account for Allocation – ‘Profit or Loss’.
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Please note it is important to check the Entity indications Cost Allocation form:
if a specific Entity is specified in the Entity field, then the month will be closed only for that one.
We recommend making the settings for each entity separately - that is, making the settings as many times as you need for how many entities you do accounting for. Or, on the contrary, do not specify a specific Entity when setting up, then the setting will be automatically applied to all entities.
12. Once settings are done, go back to the Month End Closing and month-end closing and execute it again.
The error resolvedhas been corrected, and the amount closed was directly posted to the Profit and Loss account:.
13. You may open Open a Report to see that Depreciation was close directly to Profit and Loss:
Note! As the month is executed, we advise going back to the settings and change it back to the default setting.
Go to Cost Allocation Settings, disable the option, select the correct cost allocation method Please note: After the month has been processed, create a new cost allocation settings document for the upcoming month, ensuring the settings are set to default. The period should be set to the beginning of the following month. For example, if the error occurred in January, apply the settings for January and revert to default settings starting from February (Creation of new cost allocation settings). Access the Cost Allocation Settings, choose the correct cost allocation method (as it was by default), and save the document.
The setting A new cost allocation settings document is only done created when the an error happensoccurs.
For normal Month End Closing, it should be carried by For regular month-end closings, the default allocation settings should be used.
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a FirstBIT customer! # Month-end closing error #Cost allocation