This procedure opens up a new year for the company. As discussed earlier you may have to do this shortly before the actual year-end for ‘forward postings’ in the sales and purchase ledger. You do have to run this option prior to the year-end processes in the sales and purchase ledgers and stock control.
I Haven’t Finished My Postings Yet
A common query when asked to run the ‘End of Year Procedure’ occurs if the user hasn’t finished all their postings yet.
Do not worry – your sales ledger, purchase ledger and stock system all remain in the period they were and you can continue posting. Any updates to the nominal ledger from these ledgers will update the correct period and update the opening balances for the new year this process creates. The nominal and cash book can also continue to post and report on this year as well – although you will have to prefix the period number with ‘P’.
The diagram below shows the effect of the year-end procedure on the accounting calendar.
The actions the ‘End of Year Procedure’ undertakes are:
To move all actual and budget figures for the current year back by one year
To move the old year’s actual figures back one year further still in the file
To clear all the current year’s actual and budget figures
To post the closing balances of all balance sheet accounts in the old year (which was the current year) as the opening balances for the new current year
To accumulate the net value of the closing balances of all profit & loss accounts in the old year. This it posts into the opening balance for the balance sheet profit and loss control account (defined in the nominal system profiles)
To move the accounting calendar forward one year
To ‘set’ the sales, purchase and stock ledger periods into their same period, but now in the previous year
On selection of this option the system displays the accounting year date ranges for the current and previous years plus the date range of the new year to be created. It also displays the account it will use to post the accumulated profit (loss) from the P&L accounts.
You are first prompted to ensure you have a backup.You should always take a security backup prior to running this procedure.
After confirming you have indeed taken a backup you are prompted to begin the year-end process.After you give the go ahead the system proceeds with the nominal year end and, when complete, gives you a status of the accumulated profit (loss) posted. <Enter> then returns you to the menu the year end having been completed.
Non-Monthly Periods
If you are operating a 13 period financial year – each period covering four weeks – then after the year-end is completed you will be asked to confirm the period date ranges for the new financial year. Similarly if any period date range in the current year ends on a date that doesn’t represent the end of a month you will be asked to confirm the new year period date ranges.
Article ID: 1040
Created On: Wed, Jun 27, 2012 at 2:41 PM
Last Updated On: Mon, Jun 19, 2023 at 7:15 PM
Online URL: https://kb.datafile.co.uk/article/end-of-year-procedure-nominal-1040.html