Microsoft Dynamics GP Year-End Close: Tips & Tricks for U.S. Payroll

Conducting your Year-End Close in Microsoft Dynamics GP can be complex— if you don’t know all the ways to streamline it. At Enavate, we put together a webinar series and supplemental blogs to help with just that, sharing tips and tricks to make the process more efficient and less stressful.

In this session, we’ll cover: 

1. Form updates 
2. Preparing and closing process for the Year-End 
3. ACA reporting and compliance 
4. Resources 

If you’d rather, you can watch the webinar outlining the tips and tricks here: 

What’s different from 2022?

Dynamics GP 18.6, released in October 2023, included a couple of new HR and payroll features. For payroll year-end wage reports, commas are now included in numbers that display on the report, whereas before they were only used in the header.  

There are also four new Letter Writing templates for HR: All Skills and Tests, Expiring Skills and Tests, Expiring Skills, and Expiring Tests. Each option will display the relevant tests and/or skills in a table format. 

As for Forms, there are no form changes for payroll for the 2023 reporting year.

Dynamics GP Year-End Close Preparations for Payroll 

When should the Payroll Year-End close be initiated? The answer to this question is complex because there are three parts to the Year-End Close. 

1. Year-End Service Pack: Starts after the service pack is release at the end of November (typically, the week of Thanksgiving) 
2. Generating the Year-End Wage File: Starts after the last payroll of the current year and before the first payroll of the next year 
3. Tax Table Updates: Update the IRS Tax changes 

Typically, the Year-End Service pack can be installed before you generate your Wage File and close out your Tax Tables. All three parts do not have to be completed at the same time.  

Generating the Wage File and doing the Tax Table Updates generally have to be completed after the last payroll of the current year and before the first payroll of the next year. 

When you generate the Wage File, it compiles all your payroll data for the current year into a table that will generate your W-2 information. It will generally override the prior year’s Wage File, so you want to have it completed after all your current year’s payroll is completed. Otherwise, if you generate the Wage File early, you won’t have all pay runs or information included. You also want to generate the Wage File before installing the Tax Tables because it will pull in the current tax information and you want this year’s information, not next year’s. 

After you generate the Wage File, you’ll complete the Tax Table updates. These are any changes to the taxes. Sometimes there are several releases depending on which states your employees were located. 

• See Step 5 details in PDF checklist.

2. Generate the Year-End Wage File 

• Process final payroll and finish Period and Quarter-End procedures.  
• Balance the 941 to your payroll summary report.  
• Create a backup in SQL before closing the year or generating the Wage File.  
• Verify the Employer State ID number in the Payroll Tax. 
  • Identification Setup window (Tools>Setup>Payroll>Tax ID)
• Build the Year-End Wage File/table (UPR10101)
  • Routines>Payroll>Year-End Closing  
  • Holds all information needed to produce W-2s & 1099-Rs
    

Once it closes and generates the file, you can go into the file and check to ensure your W2s and 1099-Rs are correct.  

The Tax Table Update should be completed after payroll close and before the first pay run of the next year. Keep in mind that you must also be logged in as ‘sa’ (System Administrator) to update Tax Tables in GP. Make sure you have the ‘sa’ password on hand. 

There are two ways to apply the taxable updates: automatic and manual.  

Before you update, go to ‘CustomerSource’ and download the TX.cab file. That file contains all the updates.  

Manual Method 

1. Copy TX.cab to local client folder 
2. Place TX.cab file in root of GP folder, typically found in C:\Program Files (x86)\Microsoft Dynamics\GP. (The location can be different on each computer.) 
3. The install will import into SQL and this only needs to be run on one install of GP. 
4. Tools>Maintenance>U.S. Payroll Updates>Check for Updates  
5. Select Manual as the method 
6. Select local client folder 
7. Click on process 

Automatic Method   

1. Tools>Maintenance>U.S. Payroll Updates>Check for Updates 
2. Select Automatic as the method 
3. Enter company code, which is typically your main phone number 
4. The update should generate 

Verify that the Taxes Updated  

• Tool>Setup>System>Payroll Tax (Last Tax Update should be 12/XX/2022) 

After you complete all three of these and the Tax Tables are updated, you can process payroll for the next year. 

US Payroll Post-Closing Procedures 

Once the payroll process is done, you can review, edit and print your W-2s and 1099-Rs. Then, you can close payroll for the year. 

STEP 1: Review & Edit W-2s & 1099-Rs (if needed) 

• Routines>Payroll>Edit W-2s 
• Routines>Payroll>Edit 1099-Rs 

STEP 2: Print W-2s & 1099-Rs 

• Routines>Payroll>Print W-2s 
• Routines>Payroll>Print 1099-Rs 

STEP 3: Open year for 2023 (if necessary) and close year for 2022 

Note: You have the option to archive HR for inactive employees or delete information for employees at this point. These are not typical tasks, but some companies want to do these activities at year end. 

Archive HR for inactive employees 

• Tools>Utilities>HR>Archive Employees 

Delete information for employees 

• Tools>Utilities>Payroll>Remove Inactive Records 

Are You on Microsoft Dynamics GP 2016? 

Microsoft Dynamics GP 2016’s End of Life was on July 13, 2021. There is no Year-End Update available for this version. Mainstream support (e.g., tax updates) for Microsoft Dynamics GP 2016 also ended on July 13, 2021. If you’re on Microsoft Dynamics GP 2016 and ready to learn about upgrading to stay compliant, reach out to your Enavate Account Manager. 

ACA Reporting and Compliance 

Here we’ll cover the distribution of forms and compliance. 

Distributing Forms 

Currently, there are no forms necessary for 1095-C/1094-C. The system will generate the W-2 and 1099 forms for you as it prints. You’ll need to order W-2 and 1099 forms if you’re printing yourself.  

Microsoft Dynamics GP does not offer the ability to email or digitally distribute W-2s or 1099s. To send them electronically, you’ll need to use a third-party solution. The two most common are Greenshades  and Integrity-Data. If you’re uploading the forms to Greenshades or Integrity-Data, they’ll likely generate the forms for you. Double-check this with your Independent Software Vendor (ISV).  

There’s one important difference from 2022: The threshold for filing W2 and ACA electronically has been lowered to 10 employees for the 2023 tax year. 

Please note that electronic reporting is required for organizations with over 250 employees. If you need to eFile, we recommend getting in touch with Greenshades, as GP doesn’t have an eFile feature.

Compliance 

If you need to check information that you’ve received from your employees, GP does not provide tools to keep you compliant. For instance, it won’t check social security numbers. To do that and remain compliant with ACA, we recommend either compliance offerings from Greenshades or Integrity-Data. 

Resources for Payroll Year-End Close 

Let’s go over the most common questions about Year-End close for payroll. 

What steps should I take to close the year? 

Visit Microsoft’s troubleshooting guide on the subject. This was used to create the payroll checklist handout, but the Microsoft guide can provide further information if you need clarification. 

Can I edit W-2s after running 2023 payroll? 

Yes, you can in the edit W-2 window. If you rerun the Wage File, any edits would be erased and need to be re-entered.  

If I use the Edit W-2 window to edit my 1095C information, will this information be lost if I rerun the Year-End Closing routine? 

Yes, any edits done in the Edit W-2 information window for W-2s, 1095-C or Dependents will be lost if you rerun the Year-End Closing Routine. 

How do I rerun the Wage File? 

Roll back the tax tables to the prior year. No one can process payroll while this is occurring. Then rerun the wage file process. Re-update the Year-End tax tables. 

Maximizing Your GP Investment 

To maximize your Dynamics GP investment, we recommend you stay on the most recent version. Upgrading to the latest version of Microsoft Dynamics GP gives you peace of mind knowing your investment is fully supported by Microsoft. This cost-effective option allows you to leverage the latest out-of-the-box reporting and smart analytics tools to make better decisions.  

We also recommend that you enhance your investment by leveraging add-on solutions or third-party solutions (ISVs) that make your Dynamics GP system even more powerful, such as: 

• Payroll 
• SOP and Inventory 
• Aerospace 
• Concrete

In addition to the above, there are many third-party solutions that can help you save time and money. 

We’ll help you build a path forward whether that’s to maintain your current solution, enhance or customize your solution as your needs change or build a migration plan at your own pace.  

For any additional questions you may have, we’re here to support you. You can also visit our Enavate Blog, where our consultants regularly post a helpful variety of content.  

If you need assistance scheduling the installation or have needs related to customer care and consulting, please reach out to Support@Enavate.com. 

For more tips on how to close out your year with less stress, go to the next blog in this series, Microsoft Dynamics GP Year-End Close: Accounts Payable & 1099 Processing.