Clients & Profits | General Ledger Newsletter

WORKING SMARTER EVERY DAY

Short and Sweet:
Closing the month with C&P

While there is no formal month-end closing requirement in Clients & Profits, there are several best-practice steps good management take to organize their books:

Make any month-end journal entries as soon as possible, including WIP entries, depreciation, accruals, write offs, payroll, etc. (Many JEs can be scheduled using recurring or reversing entries.)

As soon as the bulk of the last month's work is posted, change the accounting period in Preferences so that staffers' time entries and other work are automatically assigned to the right period. To continue working in the prior period, simply edit it during data entry.

Print the Trial Balance, Balance Sheet, Income Statement, Comparative Statements, YTD G/L, Client Invoice and Vendor Invoice Agings and store them in a 3-ring binder.

Look for out-of-balance amounts on the Trial Balance and Balance Sheet. If so, go to the G/L Auditor (it's in the G/L tools) and print the Out of Balance and Accounts Total reports.

Verify that the Client Invoice Aging equals the total of A/R accounts on Balance Sheet. Then do the same thing for Accounts Payable.

Reconcile your bank accounts as soon as statements arrive. Be sure to print the reconciliation report before saving the bank rec.

Review the Balance Sheet and Income Statement, particularly comparative ones for unusual balances and major changes from last year, then research any discrepancies.

By Robert Roll

While you may be months away from actually closing your fiscal year in Clients & Profits, you'll be a lot happier if you start doing the work now. Or better yet, work on keeping your financials up to snuff all the time.

If the real work -- balancing the books, reconciling accounts, and verifying agings -- is done every month throughout the year, closing the year should be a simple process.

When you close the year, you can't leave anything undone. Make sure all of the transactions for the year are entered and posted, then give everything a final going-over. Make sure your books are balanced, accounts reconciled, and agings verified. (In fact, Clients & Profits won't let you close the year until this work is done.)

Once you're ready to close the year, print all of the desired and required year-end reports before you run the Close Year feature in C&P. That's because after the year is closed you won't be able to run them.

Since closing the year is permanent (that is, it permanently purges journal entries from the General Ledger in preparation for the new year's work) it is a good idea to make an archival copy of the current year's database before closing the year. You'll then have a permanent snapshot in time of the database that can be opened later when someone needs it. (Consider burning a copy or two of the database onto a CD so it can be stored off-site for extra security.)

The best way to close your books is to start now. You'll make your life much easier in January (when 1099s and W2s are due, too). Your tax planner will think you're magic, your boss will think you're an angel, and you can avoid those long, caffeine-filled nights alone at the office. So bite the bullet now and put those best accounting practices to work today!

Are you closing the year for the first time? There's an easy step-by-step tutorial here.

Robert Roll has been a Clients & Profits consultant since 1994. He can be reached at (415) 775-9395.