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Photo of Tip: Closing Fiscal Year-end in MRI
January 29, 2014 10:00AM

Tip: Closing Fiscal Year-end in MRI

At this time of year, many properties are preparing to close their fiscal year end in MRI.  If this is the first year-end close you are performing in the software, we’d like to offer some tips to ensure that your close goes smoothly.

The ability to close year-end without system errors is dependent upon correct setup of the Entity calendar.  This is something you likely did several months ago, and haven’t thought about since.  You probably won’t even know you’ve done it incorrectly until now, when you try to close your first year-end.

  1. So, what does a “good” calendar look like, and how will you know if you are going to have a problem? 
    • To check your records in MRI: From the MRI Main Menu select MRI Utilities -> View/Edit Data (TBLEDIT) -> Entity Table and click the Calendar button. Examing the Balance Forward Period column in the grid to see if there is a period with a "B" value. It should be assigned to the first period in the current fiscal calendar.

  2. What if you don’t have a “B”?  How did it get that way anyway?  We’ll answer the second question first – sorry, but it’s user error. We’re not trying to be harsh, we understand that you aren’t setting up new Entities every day.
    • Here is what probably happened: In September your company became responsible for a new property (maybe it was a new acquisition; maybe it was a new management contract). As the accountant, you were the last to know (isn’t that how it always is?) and you had about 15 minutes in your busy day to get it set up in MRI. You get to the last step of setting up the Entity, initializing the calendar. Just five fields on the screen stand between you and the ability to input journal entries.
    • You can easily answer the obvious questions: Current Period, you decide, is 08/13 – giving you a place to put start-up entries; Year-End Period, another slam-dunk, it’s going to be a calendar fiscal so you type in 12/13; you know your company’s policy for Open Periods Allowed is 3 – almost done! Then you get to the Starting Period box and you’re stumped. You scroll through some of the existing Entity records, only to find that field blank everywhere you look. With no clue from MRI and only a few minutes left before you have to do something else, you figure the best answer is 08/13 – why shouldn’t your Starting Period be your Current Period? MRI does its magic and fills in the grid with a single row for: Period = 08/13; Balance Forward Period = N; Date Closed = Blank; and AP Closed = N.
    • You save the new record – MRI doesn’t give you any errors, so you figure you’re good. You go on with the rest of your busy day. You don’t notice, and won’t realize until year-end, that you are missing that all-important “B.” It’s time to close December 2013 for your entity and you get a message: "There is no brought forward period for Entity XYZ." It is at this point that you realize that the Starting Period field is critical to setting up your Entity Calendar correctly. 

  3. The rule-of-thumb is: the Starting Period should, at a minimum, be the first fiscal period for the Year-End Period value that you enter. So using the example here of a 12/13 Year-End Period, the Starting Period should be 01/13 (If your Year-End Period is 06/14, the Starting Period should be 07/13).
    • We say “at a minimum” because you could use an earlier date, but whatever date you choose should be the start of a fiscal year for that property (so: 01/12, 01/11, even 01/00 for an entity that has a December year-end).
    • You’re thinking: “But I don’t need those periods! I will never use them!” We understand completely, but here’s the thing: MRI needs those periods! You don’t have to use them, but you have to create them so that the calendar functions properly and gives you that all-important “B”.

The good news is that there is a fix; it is an easy fix! Your partners here at REdirect can help you, and you’ll be back on your way to closing year-end in a jiffy. Contact us today for help!