Unanet is one of the most powerful accounting systems available to government contractors today. Its ability to produce real-time data and project tracking sets it apart from other systems.
With such a powerful tool, you also need to be mindful of certain items while closing a fiscal year. While Unanet has step by step procedures located in the help section of the system for closing, we are going to take a closer look at some of the often-overlooked areas you need to be thinking about. When you are ready to close the year, we recommend starting with the standard period-end process. Now, keep in mind the following additional items.
Cost Posting
Cost posting is critical at year-end, so ensure all timesheets are up to date, labor and expense report costs are posted in Unanet, and all AP and adjusting journal entries are entered. If you are using accrual-based accounting, make sure that the period you set for your expenses/postings is in line with your fiscal year-end, so your expenses are recorded in the correct fiscal year.
Indirect Rates
Ensure that you have posted your indirect rates through each fiscal period of the fiscal year you are closing. You should post the final month’s indirect rates after all transactions are recorded in the fiscal year you are closing. This can be done under the financials and general ledger section of the system on the cost pool calculation screen. Be sure to review the posting to ensure all expenses are accounted for and mapped to the applicable indirect rate pools.
Revenue
If you have cost-plus contract types, you need to ensure that you post revenue one last time at a minimum at the end of your fiscal year in the system using the cost-plus recalculation option under the billing and revenue post screen. This will ensure your revenue is calculated and posted at actual rates, and your rate variance is recorded as revenue and unbilled receivables until you are ready to issue your rate settlement vouchers/invoices.
New Fiscal Year
As you roll the system over to the new year, be sure to go into the admin setup screen and establish your new fiscal year and also the associated target indirect rates in the system for your new fiscal year. If any of your projects have a markup % that differs from your G&A or M&S rate applied to ODCs on expense types in the system, be sure to make those updates on the project setup screen as well, under expense types. Any expenses entered on an expense report form starting in the new fiscal year will reference the markup % established in the system at the entry time. This makes it even more critical for companies to have their new fiscal year budgets established in advance of the start of their new fiscal year.
Make sure you update your fixed price billing schedules for the new year.
All Fiscal Periods for a year for all Posting Features must be closed prior to closing the Fiscal Year for a Legal Entity. Note: You cannot reopen a closed Fiscal Year.
The system will roll your beginning retained earnings forward to include the previous year’s net income on the Balance Sheet. Once you close the fiscal year in Unanet, the beginning balance will also show up in the general ledger detail. Note that you will not see this journal entry in the general ledger detail.
User Tip: You will only see the beginning balance show up correctly in the general ledger detail when you run a date range with the new year forward. If you include the previous year in the date range for the general ledger detail, you will not see the system updated beginning retained earnings balance. For instance, if you want to know the roll forward retained earnings balance between 2020 and 2021, your date range needs to include January 2021 onwards to reflect the correct balance. You cannot include 2020 in the date range and see the correct beginning balances.
As you enter the new fiscal year, also remember to enter an adjusting entry in Unanet to roll forward other desired accounts. For instance, you may want to enter a journal entry to roll your prior year draws or distributions into retained earnings. This allows for easier reporting to external requestors such as banks on the current fiscal year draws or distributions.
Year-End Elves
CAVU Advisors is an Unanet SPP Partner and full-service accounting outsourcing and financial consulting firm. We would be happy to assist with any questions you have regarding year-end closing in Unanet or Unanet in general. If you need assistance developing a rate budget for the next fiscal year to populate your rates in Unanet, we can assist as well. Feel free to reach out, and one of our team members would be glad to assist you.
