Things to Do in Your ERP System at the End of Every Financial Year

The financial year-end is not just an accounting milestone, it is a strategic checkpoint for your entire organisation. OurSys ERP system plays a central role in closing books accurately, ensuring compliance, preparing audits, and setting up the next year for success.

If managed properly, year-end activities in your OurSys can improve data accuracy, internal controls, and business clarity. Below is a structured guide to what should be done in OurSys at the end of every financial year.

For manufacturing companies, financial year-end is more than just closing books, it is about validating production accuracy, inventory valuation, cost correctness, and operational efficiency.

1. Close Production Orders & WIP Properly

What to Check:

• Close all completed Job orders.
• Identify long-pending WIP jobs.
• Ensure all material issues are posted.
• Post pending labor and machine hour entries.

Why It Matters:

Unclosed Job orders distort:

• MRP calculations
• Work-in-Progress valuation

Best Practice: Use OurSys Stale JO dashboard to identify old Job Orders and close them.

2. Bill of Materials (BOM) & Routing Validation

Year-end is the ideal time to validate costing structures.

Review:

• Are BOMs accurate?
• Are cycle times updated? OurSys provides a shortcut to quickly update all cycle times based on past records.
• Are Outsourcing costs correct?

Incorrect BOMs lead to:

• Wrong standard cost
• Misleading profitability reports
• Poor pricing decisions

3. Costing & Margin Analysis

Year-End Cost Checks:

• Compare standard vs actual cost using the report JO wise Standard vs Actual Cost Report under MIS reports of OurSys
• Analyse material variance using "Component wise Actual vs Expected Consumption" report in OurSys
• Identify loss making Items using the "Item wise Profit Audit Report" report in OurSys

This analysis helps identify:

• Loss-making SKUs
• High scrap products
• Inefficient production lines

4. Complete Financial Closing Activities

The primary focus at year-end is closing the books properly.

Key Tasks:

• Ensure all sales invoices and purchase invoices are recorded.
• Post all journal entries (provisions, accruals, depreciation, adjustments).

Reconcile:

• Bank accounts
• Debtors and creditors
• GST/VAT ledgers
• Inventory valuation

Verify Trial Balance matches before finalisation.

Lock accounting periods after closure to prevent backdated entries using OurSys Freeze date feature.

Best Practice: Create a Year-End Closing Checklist using Repetitive Tasks and Task Checklist of OurSys.

5. Inventory & Stock Verification

Inventory directly impacts profitability and tax liability.

What to Do:

• Conduct physical stock verification.
• Compare physical stock vs OurSys stock.
• Post stock adjustment entries (shortage/excess) using Stock Reconciliation feature.
• Revaluate old stock lots using the Salvage feature to bring down the value of old stock.
• You can also track stock accurately upto lot level in OurSys.

6. Review Receivables & Payables

Year-end is the time to clean up outstanding balances.

Accounts Receivable:

• Review ageing reports.
• Identify doubtful debts.
• Pass provision entries for bad debts.
• Follow up aggressively for collections.

Accounts Payable:

• Confirm vendor balances.
• Close old advances.
• Ensure GRNs are matched with invoices.

A clean AR/AP report improves cash flow planning for the new financial year.

7. Fixed Assets & Depreciation

Ensure Fixed Asset module of OurSys is reflecting accurate asset values.

Activities:

• Verify new assets are capitalised properly.
• Dispose of scrapped/sold assets.
• Run annual depreciation process.
• Match asset register with physical verification.

This ensures your Balance Sheet reflects true asset values.

8. Tax Compliance & Statutory Reporting

Compliance errors can become expensive.

Ensure:

• GST returns are reconciled with OurSys 2A auto reconciliation feature
• TDS entries are properly posted.
• All statutory reports are generated and archived.
• E-invoices and e-way bills (if applicable) are reconciled.

Maintain digital backups of:

• Financial statements
• Tax filings
• Audit reports

9. Close Open Transactions

Before rolling into the new financial year:

• Close old pending Sales Orders using the Stale SO dashboard
• Close old Purchase Orders using the Stale PO dashboard
• Close old Job Orders using the Stale JO dashboard
• Remove unused Not Generated documents

This avoids operational clutter in the next year.

10. Backup & Data Archiving

Data security is critical.

Must Do:

• Take full database backup.
• Test restoration process.
• Ensure cloud backup policies are active.

11. Budgeting & Planning for New Financial Year

Year-end is also the beginning.

Use OurSys Data To:

• Analyse last year's revenue by product/customer.
• Review cost centre performance.
• Compare actual vs budget.
• Set next year budgets inside OurSys
• Update price lists if required.

12. User Access & Control Review

Internal control review strengthens governance.

• Ensure the access of resigned employees have been removed.
• Review role-based permissions.
• Audit high-privilege users.

This reduces fraud risk in the upcoming year.

13. Performance & System Health Review

• Check database size growth.
• Update OurSys version (if pending).

14. Management Review Using ERP Reports

Year-end is the best time for strategic insights.

Use OurSys to Analyse:

• Production efficiency % using Operator wise Efficiency Report
• Capacity utilisation using the Machine Utilisation Report and the Die wise Capacity vs Actual Product Report
• Overall Equipment Effectiveness (OEE) using the Machine wise Production Analysis Report
• Inventory turnover ratio using Ziddle AI
• Slow-moving and dead stock using the "Stock Ageing Analysis Report" and the "Stock Movement Analysis" Report
• Product-wise profitability using the Item wise Profit Audit Report and SO wise profitability reports

This helps management plan:

• Price revisions
• Process improvements
• Automation investment
• Capacity expansion

Final Year-End ERP Checklist (Quick Summary)

  Close Books

  Reconcile Accounts

  Verify Inventory

  Run Depreciation

  Complete Tax Compliance

  Backup Data

  Clean Open Transactions

  Set Budgets

  Review User Access

  Lock Financial Year

Strategic Insight

Companies that treat ERP year-end as a business review exercise (not just an accounting formality) gain powerful insights into profitability, operational efficiency, and growth opportunities. A well-managed year-end strengthens credibility with auditors, investors, and management.