Topic: General Ledger Year End
DATABUILD for Windows Accounting allows the recording and reporting of three financial years concurrently, and thus allows retrospective posting to the previous year.
Regular backups of the company databases is strongly recommended.
The date format should be the default English (Australia), typically d/MM/yyyy.
The Year End close will roll Opening Balances for Balance Sheet accounts; move YTD actuals into Last Year fields; and the General Ledger Dates settings will be adjusted. There is an option in the “Edit” menu to delete all existing Budgets, however it is better that they remain and simply adjusted for the new year.
Steps for a Year End Rollover:
1. Check General Ledger Dates
| - | ensure that no Posting or Build Report Data functions are being performed on the network |
| - | ensure that the dates and settings are correct in the General Ledger Dates screen |
| - | ensure that there are no opening balances against the Profit account |
2. Perform a “Build Report Data” and print a Profit & Loss and Balance Sheet and confirm that the results are consistent with previously run year end reports (refer later section re Year or Period End Reports). Make sure you retain a copy of the Balance Sheet for comparison purposes after performing the rollover.
Important note: there must be no “Error Log” present, if so make the corrections and return to Step 1.
3. Go to General Ledger Dates
| - | click on the Close Financial Year (Santa Claus) button and answer accordingly to the Message: Are you sure you want to close the year? |
On the assumption that you answer “Yes” then the system will automatically post a journal against the Profit and Unappropriated Profit accounts as nominated in the “General Ledger Control Accounts” screen. The dates and settings will automatically change to the New Year settings and a default “Next Year Name” will appear, which can be changed to your own preference.
| - | click OK on the system message and Exit the General Ledger Dates screen and run perform a Build Report Data (as indicated on the message) and on completion Exit the Reports screen and Chart of Accounts screen to ensure that balances are refreshed and updated. |
| - | Return to the Chart of Accounts screen and check to see that there is no amount in the Opening Balance columns for the nominated Profit account. The Profit (or Loss) amount should be reflected in the nominated Unappropriated Profit account as a result of the automatic journal. If there is an amount then an error has occurred due to a failure in the preliminary checks. You may need to contact Databuild Support to assist. |
| - | Return to the GL Reports and run an Opening Balance report for the Current Year. Compare this to the prior year Balance Sheet that was set aside; if the balances do not agree with the closing Balance Sheet then there is a problem and recovery action may be necessary. However, the opening balance amounts can be easily edited and corrected manually if required. |
4. The final step is to go to the General Ledger Dates screen:
| - | The “Allow Posting From” date should be set according to the completion of the BAS and/or Bank Reconciliations. This date will need to be set back when you are entering the retrospective journal entries from the Tax Accountant. |
The Year End Rollover is now complete, however retrospective entries can be posted at a later date!
Retrospective or prior year posting:
The retrospective posting of accounting entries should be performed with care and an appreciation of the implications of these postings. Typically this exercise should not be performed unless the Last Year Opening Balances are complete and correct as per the Tax Accounts.
It is permitted to make postings into Last Year (the 1st of the 3 available years), subject to the date set in the function “General Ledger Dates” – “Allow Posting From”.
If you post into the Last Year date range, to either an income or expense account, then the Net Profit or Loss for the next year, i.e. the Current Year, will be inflated. Therefore you must post a manual journal (dated as the closing day of Last Year) to close out the prior year’s Net Profit or Loss, e.g. debit or credit Net Profit account accordingly and then the offset to typically Unappropriated Profit; Retained Earnings or any other Balance Sheet account.
To perform retrospective posting:
| - | amend the Allowable Posting date range back to the start of the closed year, but typically the 30th of June |
| - | after the retrospective postings, perform a Build Report Data and print the desired reports |
| - | immediately change the GL Dates screen for the Allow Posting From date to the start of the current year or start of next BAS period |
Year or Period End Reports (refer Step 2)
| - | GL Trial Balance; Profit & Loss; and Balance Sheet |
| - | GL Account Enquiry for all accounts (exclude the accounts assigned to Banks, and use the “Banks” report in the GL reports) |
| - | Bank Reconciliations |
| - | Debtors Summary report (with a date range of the current year): supports GL Debtors Control account |
| - | Creditors Summary report (as above): supports GL Creditors Control account |
| - | Job Cost Summary report (dated from the earliest date in the system up to the year end date, to assist in WIP and profit adjustment calculations, there is a Complex WIP option – refer WIP How Do I). Generally only Jobs active at year end are reported in WIP calculations. |
| - | Job Cost Summary report (with the date range for the current year): typically supports the GL Cost of Sales and GL Income accounts for the year; however there may be other GL accounts linked to Job Cost Centres |
| - | further detailed reporting can be generated as required by the Tax Accountant and Management |
End of Document