1. The month-end closing process

Technical - Open new accounting period (FI)

FI - Enter accruals/deferrals, process recurring entries and bad debt expense in AR, post depreciation and interest expenses in Asset Accounting

MM - Maintain GR / IR clearing account, post material revaluations

HR - Post payroll expenses

SD - Post goods issues for deliveries to customers

Tecnical - Close old month in MM, close sub-ledgers in FI, preliminary close of G/L in FI

Closing activitis for external purpose

CO - Reconciliation postings to FI (for cross-organizational unit CO posting)

FI - Foreign currency valuations and financial statements adjustments

Technical -Final closing of the old period

FI/CO - Creating external and internal reports

2. The year-end closing process

Pre-closing activities (begin in the old month)

Technical - Open the first accounting periodfor the new fiscal year in FI

MM - perform physical inventory count (may be performed up to a monthly basis)

PP / CO - Update product cost estimates

MM - Lowest value determination and LIFO / FIFO valuation

AA - Asset valuation and investment support

FI - Balance confirmations for customers / vendors

Technical - Fiscal year change (AA) and balance carryforward (FI)

Closing activitis for external purpose

FI - GR / IR clearing account analysis, receivables and payables reclassification, reconciliation of prior year to new year, and other adjustment postings

Technical - Final closing of the old period (AR / AP and GL)

FI/CO - Creating external and internal reports

Abbreviations:

AA - Asset Accounting

AR - Accounts Receivable

AP - Accounts payable

CO - Controlling

FI - Financials

HR - Human Resources

MM - Material Management

SD - Sales and Distribution

PP - Production Planning

GL - General Ledger

GR / IR - Goods Receipt / Invoice Receipt

LIFO / FIFO - Last in First out / First in First out (Stock valuation methods)