FAQ Number : P1d                                    Latest Update: 02/02/11

Preparing for Year End

The Year End closedown on PFM shouldn't be too terrible, as long as you have been doing regular bank reconciliations. The following should be helpful as well in the weeks running up to closedown.

1. Bank Statement - unreconciled list.  Are all the items on the unreconciled list genuine items that will appear in the next one or two bank statements? Or are they old transactions that now will probably never be presented? Are they duplicates or errors entered somewhere along the way?

If there are items like this, we suggest cancelling them off the system.  Track down who the cheque was for and what short code was used. Then go into Transaction Entry - Payments - Cancel Payments. Enter a cancellation exactly as the original item with some notes indicating this is a write off. Repeat for all entries to be cancelled and then print the transaction for Audit records.  You can then go into Bank Statements, and each 'old' transaction will have a corresponding cancellation entry - tick one against the other. Commit Changes and print the report for Audit records.

2. Clearing accounts that won't be needed next financial year.  Are there some trips or other accounts that are no longer used? If so, you might want to delete them after completing the year end closedown. If this is the case, now is the time to start looking at these accounts to see what balance is left (positive or negative), are there any further transactions likely this year - if not you might want to start clearing the accounts in preparation for deletion.  (Short codes need to have a zero balance at year end to be cleared)   Using Transfers  - Short Code Transfers - you can move positive and negative balances to other short codes.  One of the year end reports (Income & Exp including transfers) details exactly how much was transferred to clear accounts as well as showing the true income and expenditure for the code.

3. Pick a date for your last banking of the financial year. Everything relating to March must be banked with a date of March - do not make the mistake of banking items in April with a March transaction date, or your balance sheet will be out of balance at year end. It makes sense to say that a banking will be done on say Wed 30th March or Thursday 31st March and that will be the end of transactions for the financial year. Do not enter any other receipts until you get to 1st April and do these into the new financial year.

What the system does at year end

It takes the Closing Balance for each short code and makes it the Opening Balance for the new financial year.

Clears all transactions from the short codes, leaving only the opening balance. (Although transaction can be seen on the Reports By Account – Audit Trail for Short Code button, or by viewing the year end archive.)

Clears all reconciled transactions from the Bank Statement area, leaving only unreconciled items.

Allows short codes that were used in the previous financial year, but will now not be needed, to be deleted.(Period End–Delete)

Allows students, responsible people, suppliers, classes etc to be deleted if no longer required.( Period End – Delete)

The Importance of DATES!!!!!

The date is particularly important when processing batches of receipts where the money is received at the end of the financial year but not banked until the start of the following. In this situation YOU MUST either enter a date for banking before the year end, or change the receipt date for each transaction to after the year end. If you do not, then at the year end point your BALANCE SHEET will not BALANCE. Therefore, receipt date and banking date must be within the same year.

Adjustments

At year end you may wish to identify and clear –

Cheques written by you but never cashed and now out date. - Identify the cheque - its shortcode, who to etc., then use Transaction Entry - Payments - Cancel Payments to cancel it. (If you have not upgraded to version 6.06.00 enter a negative payment to cancel it)

Cheques you have received that have bounced – Go to Transaction Entry – Receipts – Returned Cheques - Enter a returned cheque entry

Duplicate entries - Again, enter a negative transaction that matches the original. Go into BANK STATEMENTS and tick both the original entry and this new entry.

Clearing Accounts for deletion

Year end is the time when old accounts that will not be needed during the next financial period can be removed.

Transfer any balance on the account to another account that is to remain in the next financial year. This could be a GENERAL or RESERVE type account if you have one, or any other account that is to receive the excess or make up the shortfall.

This should done through TRANSACTION ENTRY – TRANSFERS -  SHORT CODE TRANSFERS.

Print an Income and Expenditure report after your transfers to make sure that all accounts you wish to close have a zero balance. 

After the year end closedown you will be able to delete the accounts using PERIOD END – DELETE.

If you do not zero balances before year end closedown - If you delete accounts that have not had their balance zeroed prior to year end, the balance will be transferred to a ‘holding’ area called Excess of Income Over Expenditure which appears on the Balance Sheet report. You will then need to use Transfers to move it elsewhere.

Preparing for Year End

Go to Period End – Year End. The following screen appears -

Select the year end date at top of screen (Click on 31st March or August buttons if this is your year end date) Click on PREPARE FOR AUDIT. The following report appears.

This indicates whether the 3 key reports – Summary Balance Sheet, Income and Expenditure report and Bank Reconciliation are in balance as they should be. If they are not, it tells you, and you can then investigate. 

The Excess of Income over Expenditure figure should be zero, unless you have temporarily transferred money from old accounts and have not yet transferred them to the new accounts. Usually however, it should report NO EXCESS.

If the report states that all is in balance, print the page and then go onto print reports below. Tick / Untick the reports required and then click PRINT AUDIT REPORT

NOTE – The Audit Trail will be VERY LONG – we recommend you untick this, and if required save it as a spreadsheet rather than printing.

Year End Sequence

1.     Perform final bank reconciliation for year

2.     Clear any unwanted transactions from the unreconciled list, as detailed above

3.     Clear any old and unwanted short code accounts using Transaction Entry – Transfers. GO to Screen Enquiries – Income and Expenditure to check these accounts now have a balance of zero.

4.     Click on Prepare for Audit in Period End – Year End – and check all areas are in balance.

5.     Print all Year End Reports required from Period End - Year End tab – and check they are correct.

6.     Print an Unpresented Items List for each bank account in Transaction Entry – Bank Statements

7.     Print Summary Statements in Reports by Account for budget holders/trip leaders if required

8.     Take an Archive BEFORE closing the year down in Period End

9.     Close the year in Period End – Year End. Check Year end date is at the top of screen. Tick to confirm you have taken an archive.  Click on CLOSE PERIOD

10.  Go to Screen Enquiries – Income and Expenditure – check that ALL figures in the columns for Income and Expenditure are showing as ZERO.

11.  Still in Screen Enquiries – change the Default Start Date to the start of the new year.

12.  Go to Period End – Delete – say Yes – then delete short codes no longer required from far left hand column.