Start A New Fiscal Year
PLEASE NOTE: Before going through the Start a New Fiscal Year process make sure that you do not need to enter any transactions in the previous year. Once the fiscal year is closed there is no way to undo this.
You don’t need to close your fiscal year at any particular time. You can continue to use your company file after the last month of your current fiscal year.
Enter Adjusting Journal Entries
Before you start a new fiscal year, you should enter your year-end adjustment journal entries.
- Enter the final year-end adjusting entries, given to you by your accountant, by selecting the Record General Journal entry from the Accounts Command Center.
- Enter a debit and credit for each account being affected by the adjustment unless the adjustment involves the accounts receivable or payable accounts.
- Select Record.
- When all adjustments are entered, go to the Index to Reports from the Reports Menu at the Command Center.
- Select the Accounts Tab and select the Trial Balance Summary report.
- Select Customize and enter the dates of the financial year closing.
- Display the report and be sure that the balances in each account correspond with the balances your accountant has.
- Go to the Setup menu from the Command Center and select Preferences.
- Select the Security tab and mark the Lock Periods option. Select the last day of the fiscal year.
- This will not allow any changes to the data file prior to this ending date.
Start a New Fiscal Year: What Will Happen
Before you begin this process it's important to understand what this process will do and how it will affect your financial data.
Make sure all entries have been made for the fiscal year about to be closed. Once this process completes, you will be unable to post transactions to the closed Fiscal Year.
Here's what's going to happen:
- AccountEdge Pro replaces last year's historical monthly totals with the monthly totals of the year just completed.
- AccountEdge Pro moves the balance of your current year earnings account to your retained earnings account and zeroes out the balances of your income, cost of sales, expense, other income and other expense accounts.
- AccountEdge Pro will automatically keep the following data:
- Entries made in your NEW fiscal year
- Entries (such as payments) attached to sales orders, purchase orders, open invoices, open bills and unbilled item receipts
- Entries attached to your unreimbursed expenses
- Entries resulting in an item's on-hand count going less than zero
- AccountEdge Pro will keep or purge all other entries according to your selections in the windows that follow. AccountEdge Pro will never purge OPEN transactions, no matter which selections you choose. Keeping transactions and other entries will increase the size of your company file and may impede system performance.
Start a New Fiscal Year Process (This task requires single-user access)
- Go to the File Menu from the Command Center and select Start a New Year, then select Start a New Fiscal Year. The Backup process window will appear.
- Be sure to make a backup copy of your company file by selecting Backup.Having this backup is extremely important as you will need it if you ever need to run reports or find information from previous fiscal years. Please label this backup file clearly and put it in a safe place.
- Select Continue after you have created a successful backup copy of your file.
- The next step explains in detail what will happen during the Start a New Fiscal Year Process.
- After you have carefully ready and understand What Will Happen during the Start a New Fiscal Year process then select Continue.
- Enter the New Fiscal Year, the Last Month of the Fiscal Year, and how many accounting periods for the New Fiscal Year. Note: this information can be obtained from your accountant.
- Select Continue.
- The Receipts & Payments to be Processed window will appear. If you will be using the features to Group with Undeposited Funds, Electronic Payments, and Pay Liabilities, then selecting the options in this step will ensure that any of these transactions that have not yet been paid or deposited will not be purged, even if they are closed. After you have made your selections, click Continue.
- The Audit Trail Entries window enables you to purge all entries the system is tracking in the Audit Trail Report. You can select this security preference at any time to keep track of any changes made to your company file. Also, if you are tracking your inventory and using multiple locations, you can purge the audit trail of the item movements.
- Select Continue.
- The Closed Transaction and Other Entries window appears. You have the option to select to keep the closed transactions in sales and purchases that would normally be purged at year end. This is helpful if you wish to refer to the detail of sales and purchases that occurred during last year. However, this information is only retained to view, you will not be able to edit these transactions. If you are processing your payroll using your company file, then you may choose to keep the paychecks that would normally be purged. Keeping this information will allow you access to your payroll reports filtered for the year being closed. Note: Selecting either of these options can result in your company file remaining large over time.
- After you have made your selections, select Continue.
- The Unreconciled Transaction window appears. Select the accounts that you reconcile on a regular basis. Selecting these accounts will prevent the closed transactions, that have not been reconciled at the time of the Start of the New Fiscal Year procedure, from being purged.
- Select Continue.
- All of your selections have been made and now its time to begin the Start a New Fiscal Year process. Note: This is the last opportunity you will have to cancel this process. If you are not sure if all the above steps have been complete then select Cancel. You may begin the procedure when you are sure all has been complete.
- Select the Start a New Fiscal Year button to begin the process.**If you receive a pop-up warning about "One or more Receive Items" please refer to this article: One or More Receive Items**
- Once the process is complete, the Command Center window will appear.
- Go to the Setup Menu and select Company Information. Be sure that the Current Fiscal Year has changed.
- Go to the File Menu and select Verify Company File.
- If there are no errors in your file, go to the File Menu and select Optimize Company File. This process will re-index your company file.
Congratulations! You have completed the End of Year Process.