Financial Year End Guide
Article ID: 2024655 Last updated: 24 November 2020
At the end of the financial year, certain steps need to be taken with any business. There are commitments to the HMRC, reporting requirements for you and your accountant.
The requirements of your business at the end of the financial year can seem daunting; you can take advantage of a number of AccountEdge's features to quickly and easily prepare your business for the new year.
You will find that most tasks can be completed even after entering transactions for the new year. With AccountEdge, you don’t need to close your financial year at any particular time. You can continue to use your company file for up to twelve months after the last month of your current financial year. AccountEdge allows you to track information from previous, current and next financial years.
Note! In this support note, we will assume a current financial year (that we wish to close) as 1st April 2015 - 31st March.
End of Financial Year Checklist
Record all your 'day-to-day' transactions:
- Ensure that all purchases, sales, banking, and payroll entries have been entered to for the financial year you are closing.
- Backup your data file before recording any end of year adjustments.
Reconcile your accounts:
- Reconcile your Bank account
- Reconcile your Debtors
- Reconcile your Creditors
- Reconcile your Stock Control
Review and start a new year:
- Review your accounts and reports.
- Provide information to your accountant
- Backup your data file after end of year adjustments
- Start a New Financial Year
Step by Step
Task 1: Backup your data file before end of year adjustments
We recommend you make a backup of your company file once all entries for the old year have been entered and before end of year adjustments are recorded.
- Make two sets of backups.
- Store one backup in a secure location away from your business.
- Name and label all backups carefully and thoroughly so that you know exactly where and what you called your year end backup. For example, name the backup file 'XYZ Ltd YE 2020 Pre-adjust'. Consider also where you are going to keep your backup file. A cloud location (such as Dropbox or similar) is stongly worth considering, along with CD/DVD/ third pary backup solutions.
Task 2: Reconcile your Accounts
i) Reconcile your Bank Account
If you enter banking transactions such as cheques and deposits, we recommend you reconcile the account after entering all such transactions for the year.
- Use your credit card statement to reconcile credit card accounts and your bank statement to reconcile your bank accounts to 31st March. Print and keep the Reconciliation report each time you perform a reconciliation (keep a copy in your Accountant file). Please refer to the AccountEdge User Guide for detailed steps on performing Bank Reconciliation for your program version.
- Even if your bank statement is dated 7th April, for example simply rule a line after the last March transaction, work out the closing balance, and reconcile with a statement date of 31st March.
More information about reconciling accounts is available here .
ii) Reconcile your Debtors
If you use the Sales command centre to record sales and customer receipts, reconcile once all sales and receipts have been entered for the year.
- Go to Index to Reports> Sales> Debtors and display the Reconciliation (Summary) report. Click Filters, and set the Debtors as of date to the last day of the financial year.
iii) Reconcile your Creditors
If you use the Purchases command centre to record purchases and supplier payments, reconcile once all purchases and payments have been entered for the year.
- Go to Index to Reports> Purchases> Creditors and display the Reconciliation (Summary) report. Click Filters, and set the Creditors as of date to the last day of the financial year.
iv) Reconcile your Stock Control
If you use AccountEdge to track stock quantities and values, reconcile once all transactions affecting stock for the financial year have been entered.
- In the Index to Reports> Stock> Items, display the Items List (Summary) report both before and after entering the physical stock-take into AccountEdge and before you enter any transactions for the new financial year which affect stock. If this is not possible, make a backup of your data file before entering transactions for the new year so that the report can be printed at a later stage.
- Perform a Stock-take. From the Stock Control command centre, select Count Stock and then click Print. Use this to perform a physical stock-take and make any adjustments necessary so that your counted stock on hand matches the stock quantities shown in AccountEdge. Information about how to do Count Stock can be found here.
- In the Index to Reports> Stock> Items, display the Stock Value Reconciliation as of your year end date. Check that the Grand Total shown at the bottom of the Items List (Summary) report matches the value of the Stock Control account from the Chart of Accounts (in the Accounts command centre). Information about how to record stock adjustments can be found here.
Task 3: Review your accounts and reports
In the Index to Reports> Accounts section, review the Accounts List Summary, Standard Balance Sheet and Standard Profit & Loss reports to spot potential issues or concerns. Look for figures which seem out of the ordinary or unexpected.
Task 4: Provide Information to your accountant
Your accountant might need to check your AccountEdge accounting information once all transactions have been entered for the current financial year.
All reports in AccountEdge can be send to printer, or exported to PDF, Excel (if you have it installed), or .CSV. Talk to your accountant to discuss their preferred method.
You can export your report to your preferred method by using the Send To button found at the bottom of every report you display to screen.
Reports your accountant might request:
NOTE! You should customise each report, setting report dates appropriate to your requirements.
Index to Reports> Accounts section:
- Nominal Ledger Summary
- Nominal Ledger Detail
- Trial Balance
- Standard Balance Sheet
- Standard Profit & Loss
Index to Reports> Banking section:
- Bank Register
- Reconciliation Report
Index to Reports> VAT section:
- VAT Return
- VAT Return Details
Index to Reports> Sales section:
- Debtors> Reconciliation (Summary)
- Sales Register> All Sales - (Customised with Sales Status set to All Invoices)
Index to Reports> Purchases section:
- Creditors> Reconciliation (Summary)
- Purchase Register> All Purchases - (Customised with Purchase Status set to All Purchases)
Index to Reports> Stock section:
Tip! Once you have provided the accountant with the information they need, lock the last financial year so that no entries can be changed or entered for the old year. Go to Setup> Preferences> Security. Set the Lock Period up to and including March, in our example. If you need to make further changes to your pre-year end figures, you can unlock the period in the same manner.
Task 5: Backup your data file after end of year adjustments.
To be completed after entering end of year adjustments.
- Your accountant is likely to provide a number of adjustments, such as journal transactions, which need to be recorded in order to finalise your accounts for the year. Once these transactions have been entered, make a backup of your data file as detailed in Task 1, above.
Task 6: Start a New Financial Year
Once the above tasks have been completed and signed off between ALL parties and relevant stake holders, you are ready to Start a New Year.
- To Start a New Year, go to the File menu and select Start a New Year> Start a New Financial Year. You will be presented with a series of windows that lead you through the process. Carefully read the information shown in each window.
- Where possible, we recommend that when prompted, you do not purge information or records, and that you keep closed records from previous financial years.
- When making the year end backup, again provide the backup name with something relevant to the year end, for example 'XYZLtd YE 2019-20 Final'.
Additional information regarding the financial year end can be found here.
Disclaimer: This information is of a generic nature. For specific advice regarding your particular circumstances please seek assistance from your accountant, HMRC, or your IT administrator as appropriate.
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