Seems like all I really have to do is open a business in Manager Accounting. Then go to
Summary >> Set Period >> Set Period >> From
Change the date to my new start date. For me that means changing 1/1/2017 to 1/1/2018.
If my payroll would be weekly, I usually ought to make some entries to split the week between the old year and the new year. Looks like most people with weekly payroll won’t even need to do that this year because 1/1/2018 is Monday.
My payroll is monthly, so I don’t need to allocate payroll between old and new years.
I suppose there would be no need to archive the old 2017 year’s business file and start a 2018 business file. Maybe if I want to change the whole way I organize my accounts and business, I would need to start a new business file.
But then, reorganizing the new year without reorganizing prior years can often make difficult to compare financial statements from one year to the next.
I would guess that Manager Accounting automatically takes care of closing all the income and expense accounts into retained earnings. But seems I might optionally capitalize all or part of retained earnings into owner’s equity or treasury stock or something like that.
Am I on the right track? Or what kinds of things am I missing?
I would recommend keeping the same business file.
What you suggested about half-way through about starting a new business file will mean that you lose all historical data (which can be useful for reporting, as you can compare both financial years on the same report).
Things you might want to do:
Set Period, as you explained in your post.
Set a Lock Date, to prevent accidental editing of previous transactions once you have submitted tax.
Here’s some documentation on the Lock Date: Manager Cloud
Other than that, I’d encourage you to re-read the guides - the financial year ends in another 6 months for me so I haven’t personally had to perform the tasks you’re mentioning just yet.
Your comments about payroll being monthly - you are most likely correct that you won’t need to make any adjustments because of this. It sounds like your financial year ends 30 December and starts 01 January (?).
No. Not if you mean open a new business for 2018. Keep the old business. Read this Guide: Manager Guides.
You should only use a start date the first time you make a transition to Manager from a previous accounting system, not when setting Manager up for the next accounting system. Manager is perpetual.
This is linked to whether you are using accrual or cash basis accounting.
Yes, this would be a valid reason for departing from normal practice.
Yes. That is why original design of the chart of accounts is so important. But unless you want to recategorize every transaction, you will have to accept this limitation. You can still access the old business records through the current version of Manager, though. So you still can compare, just not on the same report.
No, Manager does not close income and expense accounts like old-fashioned manual systems. Adjusting the displayed range of transactions under Set Period has much the same effect, but there are no closing entries.
Brucanna is correct about what I meant. However, just so that my use of the word “open” will not be misunderstood, very good that Tut made clear that you don’t need to open a whole new business in Manager Accounting. Even more so, my misuse of “start date” is confusing because there is in Settings (and only in Settings) a “start date” parameter.
I appreciate the Manager Accounting team allowing this thread to be a gentle review some accounting steps needed at year end in general And I especially appreciate the guidance on good practice specifically for Manager Accounting.
The guide to which Tut referred explains well why there is so little bookkeeping work to do at the end of the year. You still have accrual entries, as Tut said.
