Periodically, I get a call that goes something like this:
Bob – (You know, Bob, the accountant) – “We need to change our year-end in our Visual ERP system.”
What Bob might be really saying is we are being sold which will require changing our year-end. Sometimes, clients are not able to disclose the sale – I don’t pry, but I start asking questions.
The conversation might go something like this:
Kim – “What is your current year-end? What will your new year-end be? And what are the year labels on the current calendar?” A calendar in Visual ERP might look something like this:
Kim – “So when will this change in date be required?”These are all important questions when it comes to year-end changes. In some instances, the year can be shortened by deleting periods. In other instances, it may be necessary to extend the year. The changes will be dependent of the sale date and existing labels.
Bob – “Today is August 31. We will need a short period for September. We need to cut-off on September 15.” Now I really know that the company is being sold. Who has a month-end in the middle of the month?
Kim – “Have you posted any transactions into September?” Now this can go one of two ways. If Bob answers no problem, we can make changes to the calendar. But sometimes, it goes like this:
Bob – “Let’s see. I have created my reversing entries. And… I have recorded some invoices for next month’s rent.”
Kim – “Okay, you have created the entries. But have you posted them to the General Ledger?”. If the answer is no, then we are good to go. If the answer is yes, then we will need to delete the batches. That really means we “unpost” the batches. If any of these are cash transactions that have been cleared in the bank, then will need to be “uncleared”. There are a few other minor changes and then we can change the calendar.
Bob – “One other thing. We won’t know for sure if September 15 is the date until then.”
Kim – “Super. Good to know. Here are your marching orders. DO NOT POST ANYTHING INTO SEPTEMBER.
- You can create AR invoices, AP invoices, Cash Receipts, Cash Disbursements, Bank Transactions and General Journal Entries. That is anything on the general accounting side of Visual ERP.
- Do not create the manufacturing journals because they use the month-end date in the postings and balance tables.”
Bob – “But… I like to clear my banks every day. In order to clear I need to post.”
Kim – “Sorry Bob. No clearing. If you do post, it will cause you a lot more work later. I am just trying to save you some time.”
Bob – “But… We create our manufacturing journals weekly just so we can have a look at customer profitability. We use the Gross Profit Report for Post Manufacturing Journals.”
Kim – “You can run the 1st 2 steps of costing which will update your FIFO layers. Then use the Gross Profit report from Eng./Mfg. instead.” Side note – If you are standard costing you only have 1 step not two.
Bob – “Okay. I get it. Do not Post anything to the General Ledger. I will let my staff know.”
Kim – “Let me know when you have a firm date and we can work on the calendar set up. Just a heads-up- it may require making some changes to your financial reports. We can work on that later.”
Bob – “Thanks for the tips. I feel better knowing we have a plan.”