Many of the Software users are of the view that with the Start of New Financial Year, they have to create a new Company in their Accounting System as well. This is pure waste of Time. Most of the modern Software, specially date driven systems like Sage 50 and Quickbooks allow you to continue processing in the same Company / Database without any additional effort.
In sage 50 you can process the Year End once you complete all the transactions related to the Year but continue processing for the New Year without any disturbance. The maximum difficulty is the popup messages which will continue to appear warning you about the Date of the Transaction ' You are entering a transaction for different Financial Year' Even this message could be suppressed if you want. You can process the Year End when everything completed for the preceding year, that could be even after 10-12 Months from the end of the year. When you do the Year End system will calculate Profit / Loss for the Year and transfer the same to the Retained earnings.
Further, many users are unaware, that Financial statements (Trail Blance, Profit /Loss, Balance Sheet) could still be obtained without doing a yearend for the New Financial Year. However Prior Year reports wont be available untill you process Yearend.
And Your Audit trail will have Transactions not in the Date sequence due to you are entering certain adjustments, specially after the Audit is over relating to the Last Financial Year later, but that is completely ok.
In Quickbooks, You dont even have to process a YearEnd, Instead when the Ne Financial Year starts, the system automatically show up Retained earnings in Reports. (Check your Computer date)
