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What happens when you run a year end

Created on  | Last modified on 

Summary

What happens in Sage 50 Accounts when you run the year end.

Description

Run the year-end routine to close your current financial year and start the new one. This process clears balances and makes year-end postings in your accounts.

Profit and loss balances clear

The system transfers balances from profit and loss nominal codes to the Profit and Loss Account nominal code (3200 by default) on the Balance Sheet.

Remaining balances relate to new financial year transactions. The Profit and Loss Account nominal code adjusts by the profit or loss from the closed financial year.

NOTE:

The software automatically sends year-end postings to the Profit and Loss Account nominal code, a control account. To check control accounts, click Settings, then Control Accounts. The Profit and Loss Control Account is Retained Earnings.

Balance sheet balances

The system carries forward balance sheet nominal code balances into the new financial year. They transfer to the brought forward boxes in nominal records and included in year-to-date (YTD) values on the Balance Sheet report.

Audit trail postings

The journals posted to clear the balances from the profit and loss nominal codes appear in the audit trail. The software creates a report listing these journals.

TIP:

You can print the report, or export it to a file and print later.

Nominal records update

In the nominal record Details tab, the software transfers future dated transactions from the Future column to the relevant month in the Actuals column

Actual monthly balances for the closing financial year transfer to the prior year columns, allowing you to print comparison reports in the new financial year.

NOTE:

Create new-year nominal or departmental budgets using current-year actuals or budgets for profit and loss nominal codes. The values transfer to the Budgets column, with an optional percentage increase.

Product records update

The system transfers actual sales value and quantity sold in each product record to the Prior Year columns.

Future dated transactions move to the relevant monthly box in each product record. If you base new-year's stock budgets on current actuals or budgets, these values transfer to the Budgets column for your stock codes. You can apply an optional percentage increase.

Customer and supplier records update

The software transfers YTD turnover values from customer and supplier records to the Prior YTD box, and future-dated transactions to the relevant monthly box.

Financial year start date changes

Your financial year start date moves forward by one year. To check this, select Settings and then Financial Year.

Charities

On a company using funds, the system posts year-end journals for transactions posted to a fund and a profit and loss code. 

The balance of these transactions posts to the fund's nominal code. Combined with any previous year-end balances and the opening balance, this determines the fund's opening balance for the new financial year.

Next steps

When you're ready to run your year end, why not look at the following articles:

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