At the end of a financial year, once all transactions are posted and a stock-take is complete, balances must be brought forward for the new year.  The profit for the past year is transferred to retained earnings, the profit for the new year is set to zero and balance sheet figures are brought forward for the start of the new financial year.

Steps to follow at year end

There are very few things to do in Uniconta at year end

• Add accounting year
• Create “Account for transfer of year-end result”
• Create opening balances
• View opening balances
• Close old period (optional)

That’s all that is required in Uniconta. There is no need to worry about the accounting mechanics of reconciliation, depreciation, etc.

This article also provides some tips on:

• Several open accounting years
• Adjusting entries
• Review Trial Balance
• Opening balances in the Chart of Account
• Run Balance Sheet

Add accounting year

Before balances can be brought forward, a new accounting year needs to be added. This is quick and easy in Uniconta.  Use the navigation panel to go to General Ledger/Maintenance/Accounting year and click on the “Add accounting year” button in the toolbar/ribbon.

The accounting year is automatically suggested as the year following the last accounting year. In the example above, 2018 is suggested, since 2017 was the last accounting year that was set up for this company.

The accounting year is set up with 12 periods (12 months).

Period status

Why is there a ‘period status’ for both years and months?

• The year’s status can be set to “Open” while months can be set to “Not active”. This allows journal entries to only be posted in periods dated todays date (cf. the PC used) or before.
• The year’s status can be set to “Open” but earlier periods can be “Blocked”. This way no journals can be posted in periods that are closed for VAT.
• The year’s status can be set to “Blocked” or “Closed” so that all periods in the year are blocked or closed and the user does not have to block or close each period, one at a time.

Opening balance text and Voucher number

As shown in the screenshot below, when adding an new accounting year, the detail form provides the option of entering text for the opening “Balance” and “Retained Earnings”, which are carried forward automatically. A “Voucher number” and “Number sequences” can also be added.

Retained earnings account

The year’s earnings are usually transferred to an owners capital/equity balance sheet account as, for example, “Retained earnings from previous year”.

The Chart of Accounts contains a “System account” labelled ”Account for transfer of year-end result”.  This is used for “Retained earnings from previous year” in order to transfer the last year’s profit or loss from the Income Statement to the Balance Sheet when starting a new accounting year.

Read about System accounts here.

Create “Account for transfer of year-end result”

Is a standard or custom Chart of Accounts being used?

Using a standard Uniconta Chart of Accounts makes things easy, because the “Account for transfer of year-end result”  system account is already set up.

If however, a custom Chart of Accounts is being used, then a “Account for transfer of year-end result” System account will need to be set up in the Chart of Accounts. This System account should be set up on the account where the pervious year’s result is to be transferred from the Income Statement at the start of the new year.

Read about System accounts here.

Create Opening Balances

A new accounting year can be created using the “Add accounting year” button under General Ledger/Maintenance/Accounting year. The profit for the new year is set to zero and the last year’s result is transferred to the System account “Account for transfer of year-end result” in the Balance Sheet. The closing Balance Sheet amounts are brought forward to the new year.

NB: Once a new accounting year has been set up, the “Opening Balance” will be updated automatically, whenever accounting entries are made in a prior year. So there is no need to remember to update Opening Balances – the system does it for you. Opening Balances overwrite the old ones. So Opening Balances can be created even before the accounts are sent to the accountant.

View Opening Balances

Opening Balances are automatically updated when a new accounting year is set up as well as if journals are posted in the old year. Opening balances are transferred journals or anything, they are posted completely automatically. New Opening Balances overwrite old Opening Balances.

Opening balances can be viewed here:

• General Ledger/Chart of Accounts by account using the “Account Statement” button (add the “Opening Balance” field by clicking on “Layout” and “Edit” if it is not already a column heading);
• General Ledger/Reports/Posted Journals using the “Posted transactions” button (add the “Opening Balance” field by clicking on “Layout” and “Edit” if it is not already a column heading);
• General Ledger/Maintenance/Accounting year using the “Opening transactions” (remember to check the box for the required accounting year first).

Close old periods (optional)

Here are some tips for when it is useful to block or completely close accounting entries:

• Avoid transactions being posted after accounts have been sent to the accountant: If the accounts have already been sent to the accountant, and a new year has been started, it is useful to set the periods in the old year to “Blocked”. There is nothing worse for an accountant than if their client posts transactions in a year that the accountant is concurrently working on closing.
• Avoid transactions being posted in old periods: Once the accounting year has been closed, those periods can be “Blocked” or “Closed” to avoid additional accounting entries being posted in them.
• Block the same quarter in the previous year: If a year is not closed and the user has started a new quarter in an accounting year, then the user should set the same quarter of the previous year to “Blocked”.
• Block the previous year: If an accounting year has been closed and sent off, then the year should be “Blocked” to avoid further accounting entries.

Several open accounting years

It is easy to make accounting entries in a new year at the same time as finishing up any accounting entries from the prior year. That is to say, it is fine to run several accounting years concurrently. The user can go ahead and send invoices and post transactions for the new year as of January 1st, even if not all documentation has been received and transactions posted for the old year.

So while the company’s accountant is still busy closing the accounts for the old year, the user can continue to send invoices and post transactions in the new year.

Adjusting entries

When the company’s accountant is finished with the accounts and any adjusting entries, these adjusting entries need to be entered into the accounts, just like any other transactions.

The adjusting entries should be entered into the relevant journals. The journal entries can be simulated before they are posted to the General Ledger and subsequently to the Balance Sheet (as the simulated Balance Sheet/Trial Balance will automatically include the adjusting entries). This will enable the user to check that the adjusting entries result in the company Balance Sheet matching the accountants Balance Sheet.

Review Trial Balance

It is easy to check whether the adjusting entries made, result in the company Balance Sheet matching that received from the accountant.

Before adjusting entries are posted to the General Ledger, a Trial Balance can be run and reviewed to see if it matches the accountant’s Balance Sheet. If it does not, then the user needs to go back and check the journal entries.

It is possible that the user has made an incorrect entry or accidently posted a transaction to the old year between the time that the accounting records were sent to the accountant and the time that the accountant finished them.  The accountant will, of course, not have taken these new entries into account unless notified.

When the Balance Sheet is correct, the adjusting entries can be posted.

• Enter the adjusting entries into the journals.
• Open General Ledger/Reports/Financial statement and under “Include Journal” in the detail form, choose the journal with the adjusting entries that should be included in the Trial Balance.
• “From date” and “To date”: Choose the date interval for the year to be simulated.
• Click the “Generate” button to review the Trial Balance.

Opening balances in the Chart of Accounts

Accounts in the Chart of the Accounts can also be used to display opening balances. When a new accounting year is set up, account balances are transferred to the new accounting year as “Opening balances”.  So opening balances are automatically transferred and updated from the prior year’s account when setting up a new accounting year.

Here is an example using the balance sheet item, ‘depreciation’. The balance line item shows ‘Depreciations of the year inl. sold Assets’ (18655). At year end this is transferred to the opening balance account ‘Op. Balance Aggregate Depreciations’ (18650)  This avoids the previous year’s depreciation getting mixed up with the new year’s.

If desired, it is also possible to have opening balances from several accounts included in just one ‘opening balance account’.

Uniconta automatically performs, what was previously a manual ‘closing balance’ accounting entry for each account at the end of each year.

Run Balance Sheet

The annual Balance Sheet and opening balances can be run under General Ledger/Reports/Financial statement.

When using standards accounts, several Balance sheet set ups are available with different designs and numbers of columns. It is easy to edit these or set up a new design.

To learn more about Balance Sheet set up read here.

(Link coming soon in English)

Annual Balance Sheet

If the standard accounts are being used then the Balance Sheet will be called: “Saldobalance År” (Annual Balance Sheet)

If an Annual Balance Sheet has not already been set up, then it is easy to design one or edit an existing one.

The “From date” and “To date” should be set from 01-01-year to 31-12-year, as shown in the screenshot above.

Opening Balances

If the standard accounts are being used then the Opening Balances can be run using: “Primobalance” (Opening Balances)

If an Opening balance report has not been set up then it is easy to design one or edit an existing one.

The “From date” and “To date” should be set from 01-01-year to 01-01-year, as shown in the screenshot above.