Financial Year End Guide

Article ID: 2024655      Last updated: 24 November 2014

 

Introduction

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 2016.

 

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 2016 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.

  • Display the Debtors Reconciliation (Summary) report to screen. Click Filters, and set the ageing date to the last day of the financial year. Click OK to display the report.
  • If there is an Out of Balance amount at the bottom of the report, click here for more information.

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.

  • Display the Creditors Reconciliation (Summary) report. Click Filters, and set the ageing date to the last day of the financial year. Click OK to display the report.
  • If there is an Out of Balance amount at the bottom of the report, click here for more information.

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.

  • Print the Items List (Summary) report after entering the physical stocktake 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 stocktake 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.
  • Stock Control Reconciliation. 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

Review the Chart of Accounts, Balance Sheet and 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.

There are a number of ways you can provide information to your accountant. Talk to your accountant to discuss their preferred method.

  • Printed Reports: Talk to your accountant and prepare the reports they require after you have performed the necessary reconciliation and checks.
  • Reports your accountant might request:
  • Profit and Loss statement for the financial year.
  • Balance Sheet and Trial Balance reports as at the last day of the financial year.
  • Nominal Ledger [Detail] report. Make sure you include zero balances in the filters window for this report.
  • Bank Reconciliation report printed when you reconciled your bank accounts (on or just after March 31st).
  • Debtors Reconciliation [Summary] report (if you use AccountEdge for invoicing). Set the ageing date to the last day of the financial year. 
  • Creditors Reconciliation [Summary] report (if you use AccountEdge for purchasing). Set the ageing date to the last day of the financial year.
  • Items List [Summary] report (if you use AccountEdge to track Stock). Print on the last day of the financial year, after all sales and purchases for the year have been entered.

Tip!  Lock the financial year you are preparing to close. 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.  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 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.
  • When making the year end backup, again provide the backup name with something relevant to the year end, for example 'XYZLtd YE 2014-15 Final'.

Tip!  Where possible, we recommend that when prompted, you do not purge information or records, and that you keep closed records from previous financial years.

 

Additional Information

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.