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End of year

  • Associate
  • Practice Licence
  • 18 posts
  • # 111644

Can anyone help please? 

If a year end date has been entered incorrectly at the initial start up of a software package, (this is their first year on the software, so previous years will be unaffected) what do I need to do regarding the retained profit figure? 

When I tried to change the year end month to the correct month that it should be, the retained profit figure changed from the one that the Accountant gave me for the final figures.  (after all journals were completed) 

I spoke to the Accountant, as I wasn't sure on how to proceed, but they were unsure too. 

So can anyone help and tell me what I need to do please? 

 

Thanks in advance 

  • 491 posts
  • # 111645

Hi T

Its difficult to give you an answer when you haven't said which software it is that you're using. They often act differently. 

For example, if its QuickBooks (the only one that I have experience of) it is easy for you to change the year end date in Company Settings, however, as the software doesn't 'roll over' until the end of that day (31st March for example) you can get a distorted retained earnings figure on 31st March compared to 1st April.

The best way, I find, to get over this is to do the following: assuming 31st March is year end.....

On the first day of the new financial year, check the general ledger and 'temporarily move' all 1st April transactions to 2nd April. Next double check the P&L by dating it from and to 1st April of the new financial year. It should read £0.00 of all transactions. 

Now run the trial balance with a from and to date of 1st April again. The figures now will represent the same 'opening balance' figures that your accountant may have given you.

I hope this makes sense if it's QuckBooks that you're using.

  • Associate
  • Practice Licence
  • 18 posts
  • # 111650

Hi Carol,

Sorry, yes it is Quickbooks software. 

The month entered was January (for financial yr starting month)  and should have been April.  The year end is the 31st March. 

I can change the date, but was worried in doing so, before I was sure what to do about the retained profit figure. 

When you mention about temporarily moving the date, would I do this via a journal? 

As QB doesnt close down as such for year end, I assume this is the only way to get around it then? For other software I assume it would be different? 

 

Thank you very much for your help. 

 

Kind Regards 

  • Associate
  • Practice Licence
  • 18 posts
  • # 111657

Thank you. 😀

I changed the dates and it agrees to the Accountants figure, so I am very happy and so is he. 

Just one other question. When should I change the dates back that were originally dated the 1st of April,  as won't this affect the figure again? 

Kind Regards 

Tracey 

  • 491 posts
  • # 111659

Hi Tracey

No, you don't have to move the transactions via a journal - just open up each one and change the date of it to 2nd.

When I do this, I usually pop a note in the description or memo field saying 'actual date 1st April but put to 2nd for EOY TB reasons' - then I tend not to move them back unless the client or the accountant asks me to - which has never happened yet.

Glad it worked for you :-)

Carol

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