DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Account closing


#1

I need help from someone.

I am currently in the testing phase and I need to close my accounts on a monthly basis, I therefore need to transfer the amount from retained earnings to Year To Date account in the balance sheet after I have done all the necessary entries and printed out the reports etc., to start a new month. Note, the retained earnings account should show zero at the beginning of each month as it should only show the current months’ earnings. At the moment I do not have access to make an entry or to post a journal to transfer the balance on that account to Year To Date. Please advise.


Request - Special Account Implementations
#2

@ralphalmeida, please do not divert topics with unrelated questions. Yours has nothing to do with special accounts and has been moved to a new topic.

Manager is a perpetual accounting system. Therefore, you do not close accounts. Read this Guide: https://www.manager.io/guides/7470.


#3

Dear Sir,

Thank you for your reply, I appreciate.

My intention was not divert topics but to find someone who could direct me to the right topic and to assist me with my question.

I did not mean closing accounts. I meant Month-End-Closing. Our firm does a month-end-closing in order to show the results and performance for that particular month. The profit or loss for that particular month is transferred to an account in the Balance Sheet called ‘Retain Earnings Year-To-Date’. Currently Manager shows the profit or loss for the month in an account called ‘Retained Earnings’ in the Balance Sheet and the profit or loss for the following month is accumulated in the same account. Our reporting system requires that profit and loss for the prior month, is shown in a separate account called ‘Retained Earnings Year-To-Date’ and only the current months’ profit or loss for the month should be shown in the current months’ Retained Earnings Account and not an accumulation of profits or losses for the year. I only wanted to know if it is possible to clear the Retained Earnings Account and to transfer the amount of profit or loss for the the current month to a new account in the Balance Sheet called ‘Retained Earnings Year-To-Date’ so that the opening balance in the Retained Earnings Account for the following month is shown as ‘zero ‘ . Our company requires that we show the current year profit or loss in a ‘Retained Earnings Year-To-Date Account and previous years profit or loss in ‘Retained Earnings Prior Years Account.

I hope the above clarifies and I can be directed to someone who can assist.

By the way I am a Director of Finance with over 18 years of Accounting and Finance experience working for Sheraton Hotels worldwide and have now my own accounting firm and I wanted to try Manager as a new accounting software for some of my clients. There any assistance regarding this matter will be much appreciated as I am sure that many accountants out there have the same question.

Thank you.

Ralph Almeida


#4

All you have to do is create the YTD account and make a journal entry. Read these Guides:
https://www.manager.io/guides/9812
https://www.manager.io/guides/9820


#5

Dear Sir,

Many thanks for your prompt reply. The Retained Earnings Account in the Balance Sheet is generated by the system and I am not able to have access this account. There is a function in this account that sums up the debits and credits in the Balance Sheet and this amount is the same as the net profit or loss result in the Profit & Loss Statement and it should always be the same amount as in the Retained Earnings Account. Logically this is correct and this is how it should work as this account should equal the net profit or loss in the P&L. However, after the month end closing and at the beginning of the new month a journal entry is made to transfer this balance from this Retained Earnings Account to the Year-To-Date Account. At the moment it is not possible to do a journal entry as this account ‘Retained Earnings ‘ is not accessible. I am sure you understand what I am referring to. Kindly take a look at the current set up and advise what I should do to disable this account ‘Retained Earnings ‘ in order that I can transfer the balance with a journal entry.

I have worked with many accounting software during my long career and I know that this account should be accessible for a journal entry. I apologize for any inconvenience caused.

Once again, your help is much appreciated.

Ralph Almeida


#6

Yes, you are.

You are not correct. Retained earnings also reflects transfers in and out, such as distributions of earnings.

Again, you are not correct. Here is an example from a test company I just created. In addition to the default Retained earnings account, I added a YTD earnings account. When making a journal entry, both are accessible in the Account dropdown list:

You cannot. And you don’t need to in order to accomplish what you want. Here is the result of the journal entry shown above:

Perhaps you just did not scroll down in the dropdown list. Equity accounts are at the bottom.


#7

Many thanks for this information. I will take a look at this again first thing tomorrow morning and I will let you know. It is now unfortunately very late at night in Seychelles, it is already past midnight.

I appreciate your support very much.

Kind regards

Ralph Almeida