Closing the financial year Do's & Don'ts
Do not force an unbalanced year closed unless:
The client only uses one module or two modules i.e. Only Debtors or only the Wagebook.
If a client has recorded only a partial year, i.e. they purchased a subscription part-way through the year or intermittently recorded transactions.
In this case, you can force the year closed as long as:
a. all transactions have been reconciled
b. the new year has the correct opening bank balance.
Why shouldn't we force the year closed?
Forcing a year closed will affect the next financial year often causing a snowball effect in future years. For example:
- the opening bank balance in the Transaction screen and in cashflows will be wrong.
- The Accountants Annual will still be unbalanced.
- The new year will be worse, as a roll on effect from the previous year is included.
The original issue needs to be fixed before closing the year.
If this isn’t done correctly, we will only have to take more time to fix it later.
Data must be fixed before closing a year where:
the opening balance of the bank account(s) isn’t correct. Refer to HOW TO CHANGE THE OPENING BALANCE
Unreconciled transactions in the open year must be reconciled.
Unreconciled transactions from previous years
Clients can request unreconciled transactions from previous years be deleted.
Accountants will more than likely have tidied up the end of year accounts in their practise general ledger.
Recommend the client talks to their accountant first about removing transactions.