Difference between revisions of "What should I consider at month end?"

From Catalyst
Jump to: navigation, search
(→‎{{PL}})
(Bulk update)
 
(23 intermediate revisions by 6 users not shown)
Line 1: Line 1:
 +
{{Current}}
 
== Summary ==
 
== Summary ==
 
The following steps are accounting procedures that need to be taken into consideration before embarking a month end procedure (e.g. "Bank Reconciliation" & "Stock Journals" etc.).
 
The following steps are accounting procedures that need to be taken into consideration before embarking a month end procedure (e.g. "Bank Reconciliation" & "Stock Journals" etc.).
Line 5: Line 6:
  
 
== More Information ==
 
== More Information ==
 +
{{Note|title=Note|text=The nominal codes referred to in this article are the defaults that are issued with most systems. Your system may have different codes for the relevant nominal codes.}}
 +
 
=== Stage One ===
 
=== Stage One ===
 
==== {{SL}} ====
 
==== {{SL}} ====
−
*All sales invoices and credits should have been posted into the system for the accountancy period you are about to close.
+
*All sales invoices and credits should have been posted into the system for the accounting period you are about to close.
  
−
{{Note|text='''{{SL}}''' - The {{SL}} almost takes care of itself because the sales invoices, credits and most payments are all posted from the other modules of the system, {{ST}}, {{WS}}, {{VS}} and {{OP}}.}}  
+
{{Note|text='''{{SL}}''' - The {{SL}} almost takes care of itself because the sales invoices, credits and most payments are all posted from the other modules of the system, {{ST}}, {{WS}}, {{VS}} and {{OP}}.}}
  
−
*Ensure all receipts into the business, including monies received through point of sale (tills) have been posted onto the system and split into the appropriate control accounts e.g. : -  
+
*Ensure all receipts into the business, including monies received through point of sale (tills) have been posted onto the system and split into the appropriate control accounts e.g. : -
  
 
;Z900
 
;Z900
Line 20: Line 23:
 
:Credit/debit cards
 
:Credit/debit cards
  
−
* During the period, the end of day [[How should I handle takings?|daily takings]] reports should have been run and balanced to the above control accounts. Any corrections to balance them should also have been made.
+
* During the period, the end of day [[How should I deal with takings?|daily takings]] reports should have been run and balanced to the above control accounts. Any corrections to balance them should also have been made.
 
See [[How to deal with end of day till corrections]].
 
See [[How to deal with end of day till corrections]].
  
Line 26: Line 29:
 
*Ensure all purchase invoices, credits and payments have been posted onto the system for the accountancy period you are about to close.
 
*Ensure all purchase invoices, credits and payments have been posted onto the system for the accountancy period you are about to close.
  
−
{{Note|text=For New vehicle invoices, please ensure you have consulted the  [[Vehicle Integration to Nominal Ledger]] article, specifically the section: [[Vehicle Integration to Nominal Ledger#When the vehicle is delivered|Operations New Vehicles - When The Vehicle Is Delivered]]. You must reconcile the vehicle sale stock record back to each invoice and perform other crucial checks that will save huge amounts of time if they do not balance once they are in the {{NL}}.}}
+
{{Note|text=For New vehicle invoices, please ensure you have consulted the  [[Unit integration to nominal ledger]] article, specifically the section: [[Unit integration to nominal ledger#When the vehicle is delivered|Operations New Vehicles - When The Vehicle Is Delivered]]. You must reconcile the vehicle sale stock record back to each invoice and perform other crucial checks that will save huge amounts of time if they do not balance once they are in the {{NL}}.}}
  
 
{{Information|text=Late invoices may be posted after you have closed the period. These will be updated into the next month you close. Please note you may not post into a closed year.}}
 
{{Information|text=Late invoices may be posted after you have closed the period. These will be updated into the next month you close. Please note you may not post into a closed year.}}
  
 
==== {{NL}} ====
 
==== {{NL}} ====
−
*Post any journals required for the accountancy period you are closing off i.e., Wages, Expenses, Pre-payments, Accruals, Depreciation etc.
+
* Post any journals required for the accountancy period you are closing off i.e., Wages, Expenses, Pre-payments, Accruals, Depreciation etc.
−
*The Banking Journal.
+
* Post your takings into the bank.
 
**When you take the takings to the bank you need to journal the appropriate amounts out of the takings centres into your bank account centre, usually {{DataValue|Z992}}.
 
**When you take the takings to the bank you need to journal the appropriate amounts out of the takings centres into your bank account centre, usually {{DataValue|Z992}}.
−
See [[The Banking Journal]].
+
See [[The banking journal]].
−
*Perform the Bank Reconciliation and reconcile {{DataValue|Z992}}.
+
* Perform the [[Reconciling your bank account|Bank Reconciliation]] and reconcile {{DataValue|Z992}}. If you are not using the Platinum [[Reconciling your bank account|Bank Reconciliation]] program you should still check the balance on the bank account centre, usually {{DataValue|Z992}}, against your closing bank statement for the period. Taking into account any uncleared items, they should agree.
  
 
==== Stage One Close Off ====
 
==== Stage One Close Off ====
−
At this point you are now ready to complete the {{SL}} and {{PL}} month end procedure. Do not close the {{NL}} or run the Monthly Audit and Cash Book print outs because Stage Two may uncover missing invoices and transactions that we may need to post.
+
At this point you are now ready to complete the {{SL}} and {{PL}} month end procedure. Do not close the {{NL}} or run the Monthly Audit and Cash Book print outs because Stage Two may uncover missing invoices and transactions that you may need to post.
  
 
=== Stage Two ===
 
=== Stage Two ===
−
At this point the {{SL}} and {{PL}} transactions have now updated the {{NL}}. We must now perform the vehicle reconciliation and post the necessary journals and balance the control accounts on the balance sheet.
+
At this point the {{SL}} and {{PL}} transactions have now updated the {{NL}}.
 +
 
 +
* Go to {{Menu|{{NL}}|Trial Balance}}. This will show you the balance on all Nominal centres as at the end of the month you are closing. Refer to these values for the checks described below.
 +
 
 +
{{Tip|text=To see the detail behind any of the values on screen, select the centre then click {{Button|View}}.}}
 +
 
 +
==== Vehicle & Stock Valuation ====
 +
You should now perform the stock and vehicle reconciliations and post any necessary journals to balance the control accounts on the balance sheet.
 +
 
 +
* Perform the vehicle reconciliation and reconcile the Stock of New Vehicles and Stock of Used Vehicles to the vehicle valuation.
 +
** If you are on the automatic cost of sales system; run the [[How do I get a valuation of unit stock?#Valuation at a Date|Vehicle Valuation at a Date]] report and check the balances agree to the nominal balances for Stock of New and Used Vehicles.
 +
** Alternatively please see [[Unit integration to nominal ledger#At the Month End|this]] article to journal your cost of sales.
 +
 
 +
* Balance your Parts Stock Value nominal code, {{DataValue|Z922}} and post any stock adjustments.
 +
** To achieve this, run the [[How can I get a stock valuation at a date?|Stock Valuation at a Date]] report. Check this against nominal centre {{DataValue|Z922}}.
 +
*** If the values do not agree, then post a correcting journal to bring {{DataValue|Z922}} in line with the stock valuation. This adjustment is caused because of stock variances. The other side of the journal would be Stock Adjustments {{DataValue|Z923}}.
 +
** Alternatively please see [[Stock integration to the nominal ledger#Method Two|this]] article to journal your cost of sales if you are not on the automatic cost of sales system.
 +
 
 +
==== Accruals ====
 +
If you are on the automatic cost of sales system, you should check the balances on your Vehicle {{DataValue|Z940}} and Parts {{DataValue|Z920}} Accruals centres.
 +
 
 +
They should represent the value of invoices/credits you are due at the month end for vehicles and goods received by the month end, or the value of invoices/credits that have been posted in the accounting period for vehicles or goods not received until the next period.
 +
 
 +
==== VAT Control Account ====
 +
* If the month you are closing is at the end of a VAT quarter, balance the V.A.T. control centre {{DataValue|Z999}} to the V.A.T. report.
 +
** Run the VAT 100 report for the quarter.
 +
** Check that {{DataPrompt|Box 5}} agrees with the balance on the V.A.T. control {{DataValue|Z999}}.
 +
 
 +
{{Warning|text=If you are not ready to submit your VAT for the quarter do not click {{Button|OK}} to exit the report. See [[How do I run the VAT 100 report?]].}}
 +
 
 +
{{Information|text=If you are not at the end of a quarter you may specify a date range to check the balance on {{DataValue|Z999}} at that date. Do  not use this method when submitting your VAT Return. Please refer to [[How do I run the VAT 100 report?]] for instructions on how to submit a VAT return.}}
 +
 
 +
==== Balance Debtors and Creditors ====
 +
 
 +
* Balance the Debtors and Creditors to nominal centres {{DataValue|Z994}} and {{DataValue|Z993}}.
 +
** Using the Aged Debtors List and Aged Creditors List that you produced  as part of the [[How to process a month end|month end]] process from the {{SL}} and {{PL}}, check the balance on each of these agrees with the appropriate centre in the {{NL}}:
  
−
*Perform the vehicle reconciliation and reconcile the Stock of New Vehicles and Stock of Used Vehicles to the vehicle valuation. Please see [[Vehicle Integration to Nominal Ledger]].
 
−
*Balance the Stock Value nominal code, {{DataValue|Z922}} and post any stock adjustments.
 
−
**To achieve this, run a {{DataPrompt|Stock Valuation}} and check this against {{DataValue|Z922}}.
 
−
***If they do not agree then post a correcting journal to bring {{DataValue|Z922}} in line with the stock valuation. This adjustment is caused because of stock variances. The other side of the journal would be Stock Adjustments {{DataValue|Z923}}.
 
−
*Balance the V.A.T. control {{DataValue|Z999}} to the V.A.T. reports.
 
−
** Run the VAT 100 report for the relevant period, changing the dates if necessary by clicking {{Button|Advanced}} and entering the date range needed. If the month that you are closing off is at the end of a VAT quarter, there should be no need to change the dates.
 
−
** Check that {{DataPrompt|Box 5}} agrees with the V.A.T. control {{DataValue|Z999}}.
 
−
*Balance the Debtors and Creditors back to {{DataValue|Z993}} and {{DataValue|Z994}}.
 
−
**Using the Aged Debtors List and Aged Creditors List that you produced from the {{SL}} and {{PL}} earlier in the process that will be dated for the end of the month you are closing off, check the balance figure on each of these agree with the appropriate centre in the {{NL}}:
 
 
**Aged Debtors List should agree with {{DataValue|Z994}} Sales Control.
 
**Aged Debtors List should agree with {{DataValue|Z994}} Sales Control.
−
**Aged Creditors List should agree with {{DataValue|Z993}} Purchase Control.  
+
**Aged Creditors List should agree with {{DataValue|Z993}} Purchase Control.
−
*Balance the {{DataValue|Z900}}, {{DataValue|Z901}}, {{DataValue|Z902}} codes.
+
 
−
**Check the centres look sensible. {{DataValue|Z900}} & {{DataValue|Z901}} should almost be zero apart from the money that you still have on-site; the till floats and money not banked. {{DataValue|Z902}} should only be the transactions that have not hit the bank yet.
+
* Check your takings centres i.e. {{DataValue|Z900}}, {{DataValue|Z901}}, {{DataValue|Z902}} codes.
−
*Post any transactions that were missing from the {{SL}} or {{PL}} that you may have uncovered with the above checks and repeat the {{SL}} and {{PL}} month end procedure and attached the subsequent print outs to the relevant month end folders.
+
**Check the centres look sensible.
−
*Produce the Profit & Loss and Balance Sheet and check the figures are satisfactory.
+
** {{DataValue|Z900}} & {{DataValue|Z901}} should almost be zero apart from the money that you still have on-site; the till floats and money not banked.
 +
** {{DataValue|Z902}} should only be the transactions that have not hit the bank yet.
 +
* Post any transactions that were missing from the {{SL}} or {{PL}} that you may have uncovered with the above checks and repeat the {{SL}} and {{PL}} month end procedure. Attach the subsequent print outs to the relevant month end folders.
  
 
==== Stage Two Close Off ====
 
==== Stage Two Close Off ====
−
At this point we have completed all the necessary checks and the Trial Balance, Profit and Loss and Balance Sheet are looking satisfactory, so we are ready to complete the month end.  
+
You may now carry on with the [[How to process a month end|month end]] procedures from [[How to process a month end#Reports & Settings|this]] point onward.
 +
 
 +
* Having done so check the Profit & Loss and Balance Sheet figures are satisfactory.
 +
 
 +
== At the Year End ==
 +
If this is also the last month of your Financial Year, please make sure you produce an additional copy of these reports as a record of your accounts at the year end:
 +
 
 +
* {{Menu|{{SL}}|Aged Debtors Listing}}.
 +
** Select the {{Tab|Calculational}} tab.
 +
* Set {{DataPrompt|Ignore Documents Beyond Current Accounting Period}} to {{DataValue|Y}} for Yes.
 +
* Click {{Button|Print}} to print the debt list.
 +
 
 +
* {{Menu|{{SL}}|Aged Creditors Listing}}.
 +
** Select the {{Tab|Calculational}} tab.
 +
* Set {{DataPrompt|Ignore Documents Beyond Current Accounting Period}} to {{DataValue|Y}} for Yes.
 +
* Click {{Button|Print}} to print the creditors list.
 +
 
 +
* {{Menu|{{NL}}|Trial Balance}}.
 +
* {{Menu|{{NL}}|Profit & Loss|Run Profit & Loss Report}}.
 +
* {{Menu|{{NL}}|Balance Sheet|Balance Sheet}}.
  
−
Please follow the instructions in [[How to process a month end|THIS]] article for -> {{RP}} & {{NL}}, which completes the month procedure.
+
See [[How do I process a year end?]] for more information.
  
 
== See also ==
 
== See also ==
 
* [[How to process a month end]].
 
* [[How to process a month end]].
−
* [[Vehicle Integration to Nominal Ledger#At the Month End|Month end Vehicle Integration to Nominal Ledger]].
+
* [[Unit integration to nominal ledger#At the Month End|Month end Vehicle Integration to Nominal Ledger]].
−
* [[Stock Integration to the Nominal Ledger]].
+
* [[Stock integration to the nominal ledger]].
 
* [[Reconciling your bank account]]
 
* [[Reconciling your bank account]]
−
* [[How should I handle takings?]]
+
* [[How should I deal with takings?]]
 +
* [[How do I process a year end?]]
  
−
{{KB_Tags|Month, end, journals, accounting, vat, audits, daybook, bank, reconciliation, reconcile, nominal, trial balance, profit, loss, balance}}
+
{{KB_Tags|month, end, journals, accounting, vat, audits, daybook, bank, reconciliation, reconcile, nominal, trial balance, profit, loss, balance, checks, balance accounts, stock value, vehicle value, thins to check}}
−
{{FAQ}} {{KB_SL}}{{KB_PL}}{{KB_NL}}{{ZN_Accounts}}
+
{{FAQ}}{{KB_NL}}{{KB_PL}}{{KB_SL}}{{ZN_Accounts}}

Latest revision as of 13:58, 8 July 2024

Summary

The following steps are accounting procedures that need to be taken into consideration before embarking a month end procedure (e.g. "Bank Reconciliation" & "Stock Journals" etc.).

There are two stages to performing the month end.

More Information

Note: The nominal codes referred to in this article are the defaults that are issued with most systems. Your system may have different codes for the relevant nominal codes.

Stage One

Sales Ledger

  • All sales invoices and credits should have been posted into the system for the accounting period you are about to close.
Sales Ledger - The Sales Ledger almost takes care of itself because the sales invoices, credits and most payments are all posted from the other modules of the system, Stock Control, Workshop, Unit Sales and Order Processing.
  • Ensure all receipts into the business, including monies received through point of sale (tills) have been posted onto the system and split into the appropriate control accounts e.g. : -
Z900
Cash
Z901
Cheques
Z902
Credit/debit cards
  • During the period, the end of day daily takings reports should have been run and balanced to the above control accounts. Any corrections to balance them should also have been made.

See How to deal with end of day till corrections.

Purchase Ledger

  • Ensure all purchase invoices, credits and payments have been posted onto the system for the accountancy period you are about to close.
For New vehicle invoices, please ensure you have consulted the Unit integration to nominal ledger article, specifically the section: Operations New Vehicles - When The Vehicle Is Delivered. You must reconcile the vehicle sale stock record back to each invoice and perform other crucial checks that will save huge amounts of time if they do not balance once they are in the Nominal Ledger.
Late invoices may be posted after you have closed the period. These will be updated into the next month you close. Please note you may not post into a closed year.

Nominal Ledger

  • Post any journals required for the accountancy period you are closing off i.e., Wages, Expenses, Pre-payments, Accruals, Depreciation etc.
  • Post your takings into the bank.
    • When you take the takings to the bank you need to journal the appropriate amounts out of the takings centres into your bank account centre, usually 'Z992'.

See The banking journal.

  • Perform the Bank Reconciliation and reconcile 'Z992'. If you are not using the Platinum Bank Reconciliation program you should still check the balance on the bank account centre, usually 'Z992', against your closing bank statement for the period. Taking into account any uncleared items, they should agree.

Stage One Close Off

At this point you are now ready to complete the Sales Ledger and Purchase Ledger month end procedure. Do not close the Nominal Ledger or run the Monthly Audit and Cash Book print outs because Stage Two may uncover missing invoices and transactions that you may need to post.

Stage Two

At this point the Sales Ledger and Purchase Ledger transactions have now updated the Nominal Ledger.

  • Go to " Nominal Ledger Trial Balance". This will show you the balance on all Nominal centres as at the end of the month you are closing. Refer to these values for the checks described below.
To see the detail behind any of the values on screen, select the centre then click [View].

Vehicle & Stock Valuation

You should now perform the stock and vehicle reconciliations and post any necessary journals to balance the control accounts on the balance sheet.

  • Perform the vehicle reconciliation and reconcile the Stock of New Vehicles and Stock of Used Vehicles to the vehicle valuation.
    • If you are on the automatic cost of sales system; run the Vehicle Valuation at a Date report and check the balances agree to the nominal balances for Stock of New and Used Vehicles.
    • Alternatively please see this article to journal your cost of sales.
  • Balance your Parts Stock Value nominal code, 'Z922' and post any stock adjustments.
    • To achieve this, run the Stock Valuation at a Date report. Check this against nominal centre 'Z922'.
      • If the values do not agree, then post a correcting journal to bring 'Z922' in line with the stock valuation. This adjustment is caused because of stock variances. The other side of the journal would be Stock Adjustments 'Z923'.
    • Alternatively please see this article to journal your cost of sales if you are not on the automatic cost of sales system.

Accruals

If you are on the automatic cost of sales system, you should check the balances on your Vehicle 'Z940' and Parts 'Z920' Accruals centres.

They should represent the value of invoices/credits you are due at the month end for vehicles and goods received by the month end, or the value of invoices/credits that have been posted in the accounting period for vehicles or goods not received until the next period.

VAT Control Account

  • If the month you are closing is at the end of a VAT quarter, balance the V.A.T. control centre 'Z999' to the V.A.T. report.
    • Run the VAT 100 report for the quarter.
    • Check that "Box 5" agrees with the balance on the V.A.T. control 'Z999'.
If you are not ready to submit your VAT for the quarter do not click [OK] to exit the report. See How do I run the VAT 100 report?.
If you are not at the end of a quarter you may specify a date range to check the balance on 'Z999' at that date. Do not use this method when submitting your VAT Return. Please refer to How do I run the VAT 100 report? for instructions on how to submit a VAT return.

Balance Debtors and Creditors

  • Balance the Debtors and Creditors to nominal centres 'Z994' and 'Z993'.
    • Aged Debtors List should agree with 'Z994' Sales Control.
    • Aged Creditors List should agree with 'Z993' Purchase Control.
  • Check your takings centres i.e. 'Z900', 'Z901', 'Z902' codes.
    • Check the centres look sensible.
    • 'Z900' & 'Z901' should almost be zero apart from the money that you still have on-site; the till floats and money not banked.
    • 'Z902' should only be the transactions that have not hit the bank yet.
  • Post any transactions that were missing from the Sales Ledger or Purchase Ledger that you may have uncovered with the above checks and repeat the Sales Ledger and Purchase Ledger month end procedure. Attach the subsequent print outs to the relevant month end folders.

Stage Two Close Off

You may now carry on with the month end procedures from this point onward.

  • Having done so check the Profit & Loss and Balance Sheet figures are satisfactory.

At the Year End

If this is also the last month of your Financial Year, please make sure you produce an additional copy of these reports as a record of your accounts at the year end:

  • " Sales Ledger Aged Debtors Listing".
    • Select the [Calculational] tab.
  • Set "Ignore Documents Beyond Current Accounting Period" to 'Y' for Yes.
  • Click [Print] to print the debt list.
  • " Sales Ledger Aged Creditors Listing".
    • Select the [Calculational] tab.
  • Set "Ignore Documents Beyond Current Accounting Period" to 'Y' for Yes.
  • Click [Print] to print the creditors list.

See How do I process a year end? for more information.

See also


Feedback
Thank you for using our Knowledge Base, we value your feedback. Did you find this article useful? 'Yes' or 'No'
Keywords AND Misspellings
month, end, journals, accounting, vat, audits, daybook, bank, reconciliation, reconcile, nominal, trial balance, profit, loss, balance, checks, balance accounts, stock value, vehicle value, thins to check
Retrieved from "https://www.catalyst-uk-support.com/kb/index.php?title=What_should_I_consider_at_month_end%3F&oldid=44377"