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January 14, 2022 10:15AM

How to Establish Proper Controls for Your Month-End Close Process in Yardi

When using Yardi real estate software to manage your business, it is vital to create a proper month-end process to ensure that you close each month thoroughly and correctly. In this article, we will show you how to establish the controls needed for your month-end closing process. 

User Permissions and Security for the Closing Process 

There are several setup items to verify before beginning your first month-end close. First, each of your properties should be set with an operating month and status. This is completed on the Property Control page, Accounting Control tab, for each property. Ensure that A/P, A/R, and Journal all have their respective current month and that the inactive box is not checked. 

Second, verify that proper property controls have been set on the Review Users or Add Users page in Yardi. Each user will have access to the property or properties identified on the Security tab under “property” on their user setup. This can be set to an individual property or a property list. Setup of correct property lists is paramount in this process. The Privileges tab allows you to identify the number of periods that the user will have access to. Access to past and future periods requests a number greater than or equal to 0. We recommend that users not have access to more than 12 months in the past or future. This will limit the mistakes around the wrong year being miskeyed. In general, we recommend that most users be provided access to only one or two future periods and no access to past periods.

For example, imagine a user’s access to past or future periods is set to 0. This means the user can post journal entries only into the current property operating month and cannot work backward or forward. So if the property operating month is still in August, but it’s currently September, the user will not be able to post journal entries for September. They will also not be able to go back and post entries for July. The 0 user privilege means that they can post entries only into the current operating month, which may be different from the current calendar month.

Third, the “group” identified on the User tab identifies the permissions that allow a user to access different parts of Yardi. To access this list of permissions, select “set permissions” from the Administration home page, then select the group that is to be reviewed. There are several permissions that affect the close process. If you will search for “%close%” in the description, this list of permissions will pull for review. Based on how you choose to close your books, different permissions need to be allowed.

It is vital to set up user security correctly so that everyone has access to the data they need to do their jobs while also ensuring that your data remains secure and accessible only by those who really need it. You will need to decide which user groups (for example, your Accounts Receivable, Accounts Payable, or Accounting teams) will have access to post past and future privileges. 

To address additional Yardi Security documentation, please see Yardi Voyager Security documentation on Yardi’s Client Central.

Manual or Automated Close Processes?

When reviewing accounts and options, you will find an option for “manual property close.” If this is selected, someone will be required to physically close the month for each property. There will be an option to close just AP, AR, Journal, or all. If closing these separately, close AP and AR before closing Journal. Once all properties have been closed, the system operating month will need to be closed as well. Once the close happens, the reporting month moves forward into the next month. For the manual close process, the user will need access to the open/close books as well as the close property, close month, and close year process in Yardi permissions. 

However, it is also possible to automate this process, where you set Yardi to close all properties at once and time the closing on a consistent date. For example, closing the previous month on the first day of the current month keeps AP in the correct period and ensures a proper cutoff of the General Ledger. If you do not feel that you need human oversight in this process, we recommend automating the closure of each operating month. It will save your team time and ensure a consistent process. To set up this automation and ensure that security is set up correctly, contact REdirect—we would be happy to walk you through the process. 

Other Items to Consider

Year-end close: Would you like your year end to close with your final monthly close for each fiscal year? If so, mark “Automatic Close Year” on the Accounts and Options Operation section. 

Month-end tie-outs: Do you tie out your balance sheet accounts before producing final financial reports for each period? We recommend tying out your accounts receivable, accounts payable, prepays, and security deposit accounts each period prior to running your financial reports. Yardi has several reports to help with troubleshooting this process. Contact REdirect Consulting to help you implement these controls and to clean up past issues. 

User security review: When was the last time security was reviewed for your Yardi setup? We recommend an annual review of users and permissions in Yardi. Contact REdirect Consulting to help with an annual security review process.

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About the Author

Jonathan Bias

Jonathan joins REdirect with a background in both Yardi consulting and public accounting, having spent time working at Yardi while in graduate school. While at Yardi, based in the Long Island office, Jonathan was responsible for Residential Implementations and the Concierge module, which resides in the Leasing pad and Rent Café environments. …