What should I consider at month end?

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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.

Stage One

Sales Ledger

  • All sales invoices and credits have been posted into the system for the accountancy period you are about to close.
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, Vehicle Sales and Order Processing.
  • 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 account.: -
  • Z900 cash
  • Z901 cheques
  • Z902 credit/debit cards
  • The end of day daily takings agrees with the above control accounts and any corrections have been made to balance them.

See How to deal with end of day till corrections

Purchase Ledger

  • All purchase invoices, credits and payments have been posted onto the system for the accountancy period you are about to close.
For the New vehicle invoices, please ensure you have consulted the "Vehicle Integration to the nominal ledger" specifically the section "Operations New Vehicles, When The Vehicle Is delivered" because you must reconcile the vehicle sale stock record back to each invoice and perform other crucial checks that will prevents huge amounts of time if they do not balance once they are in the nominal ledger.

Nominal Ledger

  • Post any journals required for the accountancy period you are closing off i.e., Wages, Expenses, Pre-payments, Accruals, deprecation etc.
  • Perform the Bank Reconciliation and reconcile Z992
  • The banking Journal
    • The receipts into the business is posted to a control centre either Cash, Cheque or Credit/Debit cards. When you lodged the money into the bank we need to post a Cash book Journal to move the value you have banked out of the control accounts and into the bank.

See The Banking Journal

  • Using the Bank Reconciliation Programme reconcile Z900,Z901,Z902.


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 perform the monthly audit and cash book print outs because stage two may uncover missing invoices and transactions that we may need to post.

Stage Two

At this point the sales and purchase ledger transaction have now updated the nominal ledger. We must now perform the vehicle reconciliation and post the necessary journals and balance the control accounts on the balance sheet.

  • Perform the vehicle reconciliation Vehicle Integration to Nominal Ledger
  • Balance the Stock account Z922 and post any stock adjustments.
    • To achieve this, run a Stock Valuation and check this against Z922.
      • If they 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.
  • Balance the VAT control Z999 to the VAT reports.
    • Run VAT100 changing the dates by click advanced and check the box 5 agrees with the VAT control Z999.
  • Balance the Debtors and Creditors back to Z993 and Z994
    • Using the debtors and credits that you produced from the sales and purchase ledger month end earlier that will be dated to the end of the month you are closing off, check the balance figure on each of these agree with the appropriate centre in the nominal ledger
    • Z994 Sales Control
    • Z993 Purchase Control
  • Balance the Z900,Z901,Z902
    • please check the centre look sensible. Z900 & Z901 should almost be zero apart from the money that you still have on-site; the tills float and money not banked. Z902 should only be the transactions that have not his the bank yet.
  • Post any transactions that were missing from the sales or purchase ledger that you may have uncovered with the above checks and perform the sales ledger and purchase ledger month end procedure and attached the subsequent print outs to the relevant month end folders.
  • Produce the Profit & Loss and Balance sheet and check over the figures and make sure things are looking in order.

Stage Two Close off

At this point we have completed the all the necessary checks and the trial balance, profit and loss and balance sheet is all looking satisfactory then we are ready to complete the month end. Please follow the instructions in the How to Process an month end for -> "Reports & Parameters" & "Nominal Ledger", which completes the month procedure.


See also


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Month, end, journals, accounting, vat, audits, daybook, bank
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