End of Year Processing

In Tenant Pro 7, a “Property Close” can be done at any time.  Use the Property Close command when all transactions for the year have been entered for the properties and you are ready to close your books.  The Property Close command has no impact on your tenant ledgers, retaining all tenant records as they existed from the time the tenant moved in.  Before proceeding with either form of property close procedure, you should make a backup copy of your data file.

Procedures to Complete Prior to Property Closing

You can continue with your day-to-day operations until ready to perform the close for your properties.  All dates will be recorded appropriately, even after closing takes place.

There is no need to worry about the non-reversible affects of the property close feature because Tenant Pro 7 will allow you to make adjusting journal entries to modify the new year’s beginning balances if you have already closed your books.  For example; if your accountant is reviewing your books, but won’t have the adjusting journal entries ready until after you have closed your year, you can go ahead and enter these transactions as General Journal entries that have any date up to the last day of the previous year.

Determine Which Properties will be Closing

When you perform an Annual Closing, the properties affected are only those which have a Current Fiscal Year Start Date (as shown in the Properties window) which is the same as that entered in the Property Close window.  For example, only those properties using the calendar year (Jan-Dec) as their fiscal year will need to be prepared for closing when a January 1 date is entered.

Enter Closing Transactions

Closing transactions should be entered prior to executing the Property Close function.  Some examples of closing transactions are journal entries for interest, amortization and depreciation.

Print Financial Reports

Tenant Pro 7 will let you print reports regardless of the fact that you have closed the property or period.  If you want a paper history prior to the closing, then print reports in advance of the Close Property function. 

Some reports you might consider printing are the detailed General Ledger, the December Balance Sheet and Operating Statement.  You may also find it informative to print a 12 month Operating Statement.  We suggest you consult with your tax accountant or CPA to help determine the financial reports that would be most useful to you.  If you find later that you need a report you originally neglected to print, Tenant Pro 7 will still allow you to print it at that time.

Print 1099s

Businesses are responsible to prepare IRS Form 1099 to any vendor or owner whose payments for the year total $600.00 or more.  Typically, IRS Form MISC is used.  Tenant Pro will print the necessary information on pre-printed IRS approved forms which can be purchased from Tenant Pro Forms Division at 800-544-3427.

To produce 1099s to Vendors, the Vendor window must be marked to Generate 1099 Forms.  A valid taxpayer ID number for both Vendors and Owners will be required.  These will need to be entered in the Vendors and Owners setup windows.  Totals for 1099s are always based on a calendar year regardless of the fiscal year for your properties.  It is possible to print 1099s either before or after you perform an annual closing.

1. From the main menu, select Reports>Vendor Reports.
2. Select Owner 1099 or Vendor 1099 as appropriate.
3. Select Owners or Vendors for which 1099s are to be printed.
4. Click View.  You may want to print this to blank paper to verify proper alignment prior to printing on the actual 1099 forms.
5. Make alignment adjustments, as needed.
6. Click Print.

Backup Your Data File

We cannot stress enough the importance of making a backup copy of your data file prior to performing your end of year close.  The purpose of this is to retain a historical record of the financial standing of your managed properties at a fixed point in time, namely:  year end. 

NOTE:  We suggest that you make a minimum of two backup copies.  One copy should be made to your hard drive and the other copy should be made to disk or tape.  The hard drive copy is recommended as a convenience, because you may wish to extract detailed information from a copy of your old year data file.  This will allow you an easy way to create reports, to print 1099s, and to make prior year adjustments after closing.

Performing Your Property Close

When all procedures to prepare for your year-end close have been finished, you may begin the actual processing.

NOTE:  Before beginning, make sure that you are in the correct data file.  You do not want to perform the End of Year closing procedure on the backup copy of the data file.  The End of Year close must be performed on all data file(s) that you will continue to work from.

From the main menu, select Accounting>Property Close.

1. Select Annual Closing or Periodic Closing.
   • Annual Closing moves the Current Fiscal Year Began date of the property forward one year and updates the Year-to-Date totals on the tenant and vendor ledgers.  This will occur for every selected property with a Current Fiscal Year Began that matches the date entered.
   • Period Closing closes (locks) the financial transactions through the desired date for all selected properties.  This may be done in conjunction with the annual closing to lock all entries for that annual period or at any other time you deem necessary.
2. Enter the date.
   • For Annual Closing this will be the Current Fiscal Year Began date for the properties you want to close.  If you are unsure of this date, go to Setup>Property and look at the Current Fiscal Year Began field to identify the appropriate date.  Tenant Pro allows you to operate several different fiscal years, but the only properties that will close, will be those that correspond to the date entered in this field.
   • For Periodic Closing, it will be the date of the last day that you want to close (lock the transactions.)
3. Enter your property selection.  When selecting Annual Closing, All Properties refers to all properties whose current fiscal year start date corresponds to the date you entered in the uppermost field and which are NOT designated as “Inactive.”  If you want to include Inactive properties, you must click to place a checkmark in the appropriate box.  If you are not prepared to close all properties with corresponding dates, you must select from a list of properties.
4. Click Close Properties to process.  When it is finished, a message will tell you how many properties were closed.

 

The following screenshot shows that the fiscal start date for a property changes automatically after you close it at the end of the year:

 

 

The below screenshot shows you what your General Ledger for the property will look like, post close:

 

Entering Prior Date Adjustments After Closing

If needed, you can still make adjusting entries after you have performed a property close.  The manner in which you make adjustments will depend upon whether you have performed a property close or a periodic closing.  Under either option, in order to keep your records accurate, it will require that you make adjusting entries twice --- Once to the data file that you have copied on your hard drive, which will update your historical record, and once to your regular working data file.

For Property AND Periodic Closing

Open the backup copy of your data file made just prior to closing.  Make any necessary entries using the original transaction date or the closing date.  It is recommended that you use the Memo field to make note of the fact that the entry was made after the initial property close.  If you want to ensure proper records, any changes you make to your backup data file will necessitate making new backups and printing new reports.

For Property Closing Only

Open your regular data file used for current transactions.  Ideally, if the entry had been made prior to the property closing, it would have updated your beginning balances for the New Year.  Since that did not occur, you will need to duplicate the entry in this data file to update it with the transaction that is missing.  When recording the transaction, use the first day of the new period with Memo to make it easy to identify.  Also, if the entry involves either an income or an expense account, you should use “Retained Earnings” or another Owner’s Equity account in its place, so the current period’s financials will not be affected.

For Periodic Closing Only

Remember that after a Periodic Closing, you will only be able to enter transaction with a current or future date.  To make the necessary adjustment in the current data file, you will need to edit the freeze date.

• Locate the applicable property in the Properties List and open the Properties window.
• Make note of the Property Freeze Date displayed.
• Edit the Property Freeze Date to a date that precedes that of the adjustment entry.
• Make any necessary adjusting entries.
• Reprint reports, as needed.
• Go back into the Properties window and edit the Property Freeze Date back to its original date.