How to start your financial year mid month

 NOTE:  For the purpose of this article the following example will be used: The financial year runs from 6th April 2023 to 5 April 2024, you must set the start date to be April 2023. This means that any transactions posted between 1 and 5 April 2023 are posted into the following financial year in Sage Accounts. The effect of these transactions is not recorded on the current year's management reports and is not cleared when you run the Year End option.

To establish the balance of the transactions posted beyond the year end date

1. Click Nominal codes then click Reports.
2. Click Nominal then click Nominal Activity and click Print.
3. Complete the Criteria window as follows, then click OK:
   
   

   Nominal Code	Leave these fields as the default nominal codes.
   Transaction Date	From the first drop-down list choose Between (inclusive). In the second box, enter the first day after the current Sage year end date, in this example 01/04/2024. In the last box, enter your actual year end date, in this example 05/04/2024.
   Transaction Number	leave these fields as the default numbers.
   Inc B/Fwd Tran	Do not select this check box.

4. The History Balance figure for each nominal account represents the balance of all transactions posted to these accounts between the dates specified. These are the values that need to be moved from the new financial year into the current financial year.

You have now established the values that need to be moved into the current financial year. You now need to reverse these balances in the new financial year. For further information about this, please refer to the following section.

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To reverse the effect of the transactions posted beyond the year end date

To reverse the effect of transactions posted beyond the year end date you need to run the Nominal Activity report then post a series of journals.

In this example, the following History Balances appear on the Nominal Activity report:

N/C	Name	Debit	Credit
1100	Debtors Control Account	1762.50
2100	Creditors Control Account		881.25
2200	Sales Tax Control Account		262.50
2201	Purchase Tax Control Account	131.25
4000	Sales		1500.00
5000	Purchases	750.00

1. Click Nominal codes then click Journal entry.
2. Enter a date and reference for the journal, then enter the information required to reverse the effect of the transactions posted beyond the year end date. You should use the year end date to post the journal, in our example use 05/04/2024.

   
   

   N/C	Name	Details	T/C	Debit	Credit
   1100	Debtors Control Account	Reverse transactions dated beyond year end	T9		1762.50
   2100	Creditors Control Account	Reverse transactions dated beyond year end	T9	881.25
   2200	Sales Tax Control Account	Reverse transactions dated beyond year end	T9	262.50
   2201	Purchase Tax Control Account	Reverse transactions dated beyond year end	T9		131.25
   4000	Sales	Reverse transactions dated beyond year end	T9	1500.00
   5000	Purchases	Reverse transactions dated beyond year end	T9		750.00

3. Click Save, then click Close.

You have now cleared the effect of the transactions from the 2023 - 2024 accounts. You now need to reverse this journal using the last date of the current financial year.

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To post the effect of the transactions into the current year's accounts

To post the effect of the transactions into the current year you need to reverse the journals posted in the previous section with a date in the current year.

1. Click Nominal codes then click Journal Entry.
2. Enter a date and reference for the journal, then enter the information required to reverse the effect of the transactions posted beyond the year end date.
   • Note: You should use the last date of your current financial year to post this journal, for example 31 March 2023.
     
     

     N/C	Name	Details	T/C	Debit	Credit
     1100	Debtors Control Account	Reverse transactions dated beyond year end	T9	1762.50
     2100	Creditors Control Account	Reverse transactions dated beyond year end	T9		881.25
     2200	Sales Tax Control Account	Reverse transactions dated beyond year end	T9		262.50
     2201	Purchase Tax Control Account	Reverse transactions dated beyond year end	T9	131.25
     4000	Sales	Reverse transactions dated beyond year end	T9		1500.00
     5000	Purchases	Reverse transactions dated beyond year end	T9	750.00

3. Click Save  and click Close.

You have now posted the effect of the transactions into the current year's accounts.

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To reconcile your Debtors and Creditors Control Accounts with the retrospective Aged Debtors and Creditors reports

Using this method to correct your accounts means that if you subsequently attempt to reconcile either the Debtors or Creditors Control Accounts to the Aged Debtors or Creditors reports using a date between the Sage year end date and the actual year end date there will be a discrepancy.

The reason for this is that the aged balances report uses the invoice date whereas the nominal codes have had the effect of the invoice reversed from the future period into the current financial year.

Using the above example, at the Sage Accounts year end date the balance on the Debtors or Creditors Control Account would be £1762.50 greater than the balance on the retrospective aged Debtors report ran to the same date.

To reconcile the two figures you need to manually reduce the balance on the Debtors and Creditors Control Account by the value of any journals posted.

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To reconcile the VAT Return with the VAT Control Account

Using this method to correct your accounts means that if you reconcile the VAT Return to the Sales or Purchase Tax Control Accounts at the Sage Accounts year end date there will be a discrepancy. This is because the VAT Return will not include these journal transactions but the balances on the Tax Control Accounts do include these journals.

Using the example used in the previous sections, the balance on the Sales or Purchase Tax Control Account would be higher than the VAT on Sales figure in Box 1 by 262.50, or the VAT on Purchases figure in Box 4, by 131.25.

To reconcile the two figures you need to manually reduce the balance on the Sales or Purchase VAT Control Account by the values of the journals posted to these accounts. These VAT figures will be included in the subsequent VAT Return because the relevant transactions that generated the figures are dated beyond the year end date specified in Sage Accounts.

This adjustment can be made using the Adjustments button after the VAT Return has been calculated.

If you've already run year end for the period

We would recommend following the steps in this article before running your year end for the related period. However, if you've already run your year end, you should still follow the steps described above, but also post an additional journal to transfer the profit and loss nominal code figures for the extended period onto the balance sheet nominal code 3200.

1. Click Nominal codes > Journal Entry.
2. Enter a date and reference for the journal, then enter the information required to reverse the effect of the transactions posted beyond the year end date. You should use the last date of your current financial year to post this journal, for example 31 March 2023.
   
   

   N/C	Name	Details	T/C	Debit	Credit
   4000	Sales	Adjustment to year end	T9	1500.00
   5000	Purchases	Adjustment to year end	T9		750.00
   3200	Profit and loss account	Adjustment to year end	T9		750.00

3. Click Save then click Close.