How does closing a contract affect the general ledger?
Soft closing has no effect on GL. Final (hard) closing has an effect on GL if you use separate accounts for open and closed jobs in the JC department file.
In that case, final closing means that any additional entries will go to the accounts for closed contracts/jobs. You can have the JC Contract Close program make automatic journal entries while closing each contract/job, so that all of the revenue and costs will be moved from the open accounts to the closed accounts. This is accomplished by selecting the Summary or Detail radio buttons on the GL Close tab in the JC Company Parameters program. This allows automatic entries to be made, either summarized by department or for every contract.
The automatic GL entries on closing should be used only if you are very consistent with how you post job costs to GL. The process looks only at the cost type accounts set up in the JC Departments. It does not look at the actual accounts you posted to or at the special Payroll accounts by Earnings and Liability type in the department file. For example, the total job-to-date labor cost will be transferred from the open labor account to the closed labor account currently shown in the JC Departments.
The following table summarizes the effects of the two closing steps, in conjunction with the Allow Posting to Soft-Closed Jobs and Allow Posting to Hard-Closed Jobs checkboxes in JC Company Parameters:
|Open||Soft Close||Hard Close|
|Enter Costs: Y||Allowed||Warning, but allowed||Warning, but allowed|
|Enter Costs: N||Allowed||Not allowed||Not allowed|
|GL Accounts Used||Open||Open||Closed|