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End Of Year Close The end of year close process should be run at the end of the financial year when you wish to create a new series of data files for the following (up coming) financial year. You need not have all your figures finalised at the end of the financial year in order to start the new year in either CAPITAL Office or CAPITAL GL Controller. The term "closing" at the end of the year is not, strictly speaking, correct. You will still be able to go back and continue work on the old year if you wish, but note that entries posted to that year will not automatically flow into period 1 of the following year. Any journals posted to the old financial year would also need to be reflected in the new financial year at least for balance sheet items. Adjustments made to your revenue and expense accounts for the last period of the prior year would, of course, need to be reflected in adjustments to your retained earnings or "reserves" account for period 1 of the following year. CAPITAL Office users need not worry that an end of year roll-over must be performed at the exact end of the financial year in order to continue working. CAPITAL Office will automatically generate batches for the upcoming financial year if necessary, ready for posting into the new year after the roll-over process has been performed. CAPITAL Office also provides 60 days of "grace" into the new year before it begins issuing warning messages that the end of year roll-over is still to be performed. (You may also either ignore or deactivate the warning message if you need more time.) See The End Of Year Roll Over Process following which describes the various activities performed by the end of year close or roll-over process. Retained Earnings Account Enter the account code that all profit and loss items (revenue and expense accounts) should consolidate to in period 1 of the new year. Your retained earnings account must be a credit type. Copy Budget Into New Year Click to tick (the default) if you wish to copy the old financial year's budgets into the new financial year.
The next general journal number to use is not set back to 1. You may wish to perform this step manually via the chart of accounts utility.
If you have not correctly specified your opening and closing stock accounts in your chart of accounts (if you use these accounts in your chart) then retained earnings will not be correctly calculated. Always print your financial statements for the new year and check that you now have the results you expected based on your old year's closing figures. If this is not the case (i.e., because the general ledger chart of accounts was not correctly set-up) you may have to post additional journals to correct any differences. Once you have created the new financial year, run a Trial Balance to ensure that your accouning records still balance. Be sure to include all accounts on the report. (This is the default behaviour.) If CAPITAL GL Controller reports that your chart of accounts does not balance, you can run the Accounts Integrity Check utility to rebalance the chart of accounts. Note that this utility will only ensure that your debit postings equal your credit postings in your general ledger. You must still locate the account or accounts that have caused the error and create manual journals to correct the problem. |
Special Notes: Make a back-up
and retain this back-up for future reference before running
the end of year process. If mistakes are detected in your
accounting information after the end of year process has run,
restoring the back-up will allow you to go back, correct your
errors, and redo the end of year process again.
Trouble-Shooting