SAP R/3 has built in programs which automate year end closing. At one of our clients who recently implemented SAP R/3 and has gone live since Febraury 2006, the person responsible for closing the general ledger explained to me the various steps involved in closing the general ledger in SAP. Our discussion brought out the minimum number of steps required to close the general ledger and subsidiary ledgers in SAP. Though most of you must be pretty familiar with the process, I am jotting the same below:

1. Close the Posting Periods to prevent further postings of transactions to the accounts.
2. Analyze and evaluate the open items.
3. Analyze and evaluate the balances in foreign currencies
4. Make a list of all incoming and outgoing payments including open items on the basis of due dates.
5. Determine vendors with a debit balance and customers with a credit balance.
6. Post re-valuations and adjustments.
7. Post accurals and deferrals.
8. Finally, print the balance sheet and Profit & Loss account.

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