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Month-end Procedures Overview
Month-end procedures usually are performed at the end of every month, but they can be done at any time during the month. The key to success is to perform these tasks regularly. Some tasks need to be performed at a specified time every month. Consult your accountant if you’re unsure which of these tasks are required for your business.
Reviewing a trial balance report—also known to accountants as a general ledger—regularly is an optional month-end task, but it can make your job easier in the future. If you regularly review your trial balance, you’ll spot incorrectly recorded amounts quickly and will be able to fix them without much effort. If you decide to skip this procedure, however, and an error appears, you may find yourself sifting through several month’s worth of transactions trying to find the one that’s incorrect.
Click below for the step-by-step procedure:
Reviewing the monthly amounts you’ve budgeted for your accounts will help you keep your fingers on the pulse of your business. The best way to do this in Accounting Plus is to consult a special balance sheet, called the Analyze Balance Sheet, that’s designed specifically for budget analysis.
You can print the Analyze Balance Sheet report, which lists your accounts’ actual balances for the current month, along with the amounts you budgeted for them. If you want information about customizing the Analyze Balance Sheet report, see Choosing settings for a specific report. Please note, though, that you don’t need to make any modifications to print the balance sheet in its standard format.
If you’ve determined that changes need to be made to the amounts you’ve budgeted for the coming months, you can adjust your budget.
Click below for the step-by-step procedure:
Having an acceptable supply of available cash can often make a huge difference in determining how well your company performs next month. In Accounting Plus, you can use the Cash Flow Worksheet window to estimate your short-term cash needs by using information you’ve entered throughout Accounting Plus to create a forecast of your checking accounts’ future.
The information used in the Cash Flow Worksheet window to forecast cash needs comes from recurring Spend Money and Receive Money transaction information that you’ve entered in Accounting Plus, as well as the sales and purchases that will fall due during the time frame you’ve selected.
Because each company’s business practices are unique, we can’t tell you precisely what you should look for when reviewing your cash flow. See Reviewing cash flow for some ideas. Your accountant can give you additional ideas based on the way your company does business.
Click below for the step-by-step procedure:
Knowing what items you have on hand is fairly simple. Knowing which items are on order from vendors and promised to customers is more complicated. Many businesses keep what they call an “order book.” It’s what they use to track the comings and goings of inventory items.
The Analyze Inventory window functions as your “order book” by monitoring what you have:
The Analyze Inventory window allows you to review the current status of the items you’ve entered into the MYOB system. The fields in this window are display-only; that is, you can’t change any of the information using this window. You should note that the Analyze Inventory window shows quantity information only. If you want to see past sales activity of items, use the Analyze Sales window to do so.
Click below for the step-by-step procedure:
After you’ve used Accounting Plus for a long time, you’ll notice that the size of your data file has grown considerably. Information such as journal entries, invoices, bills, activity slips and business contacts build up over time. When your data file has grown larger than you want it to, you may want to remove the parts of the data that are no longer needed from the file. The process of removing data from your data file is called purging.
When you purge information from your records, you should plan out a strategy to do so. We strongly recommend that you purge your information in the following order:
Business contacts can be purged at any time.
You can purge activity slips that haven’t been billed on invoices. If you’ve billed an activity slip on an invoice, you can purge that activity slip only if the invoice on which it was billed has been purged.
Click below for the step-by-step procedure:
If you choose Purge Detail Only when purging sales and purchases the detail information that was entered in the scrolling list section of the sale or purchase will be removed; information, such as, ID number, date, customer or vendor name, memo, comment, salesperson and vendor invoice number or customer purchase order number for each closed sale and purchase will remain. The zoom arrow that appears before journal entries for these sales and purchases will be gray. Click the zoom arrow to display the window in which the original transaction was entered -- detail information mentioned above will not display. You won’t be able to make any changes to this window.
If you choose Purge Entire Sale or Purge Entire Purchase, all information about the closed sales and purchases will be removed. The journal entry will remain in the Sales or Purchases Transaction Journal window, but no zoom arrow will appear; you’ll no longer be able to display the window in which the original transaction was entered.
If you purged entire closed sales or purchases and you wish to also remove the journal entries for these closed transactions from the Sales or Purchases Journal, follow the steps for To purge journal entries.
Click below for the step-by-step procedure:
To view purged information using the Sales Journal -- if you purged detail only
To view purged information using the Purchases Journal -- if you purged detail only
To ensure the accuracy of your business records, you should keep a record of your checking accounts’ balances matched up with your bank’s records. This task is called reconciling accounts.
Once you’ve made sure all the checks and deposits that appear on your bank statement are entered in Accounting Plus, you’re ready to reconcile your account.
If your account is out of balance, a window will indicate the amount by which your account is out of balance, and will provide you with a few ideas of how the out-of-balance situation might have occurred. Here are some additional things you might want to verify:
If you decide to exit the Reconcile Accounts window without successfully reconciling a checking account, the transactions marked as cleared remain marked. You can pick up where you left off at any time.
If you wish, you can enter bank service charges and interest using the Reconcile Accounts window. You’ll click the Bank Entry button to open the Bank Entry window. If you’ve received bank service charges, enter an amount in the Service Charges section. If the account you’re reconciling is a Detail Checking Account, the bank fee, when recorded, will appear as a check transaction assigned to the checking account you’re reconciling. The next available check ID number is assigned to the transaction. (If the account you’re reconciling is a Detail Account, a General Journal entry will be recorded.) Verify the date and enter the account you wish to allocate the charges to (usually an expense account). Add a memo if you wish.
If you received interest, you’ll enter an amount in the Interest Earned section. If the account you’re reconciling is a Detail Checking Account, the interest, when recorded, will appear as a deposit transaction assigned to the checking account you’re reconciling. The next available deposit ID number is assigned to the transaction. (If the account you’re reconciling is a Detail Account, a General Journal entry will be recorded.) Verify the date and enter the account you wish to allocate the bank interest to (usually an income account). Add a memo if you wish.
Most likely, some of the checks you wrote and some of the deposits you made before you began using Accounting Plus will be reflected in your bank statement when you reconcile an account for the first time using Accounting Plus. In order to reconcile the account, these transactions must also appear in the Reconcile Accounts window, but, since you conducted the transactions before you began using Accounting Plus, there will be no Accounting Plus record of those transactions. This situation must be resolved before you can reconcile the checking account.
To resolve the situation, you’ll create a general journal entry—using the amount of each of the uncleared check and deposit transactions you conducted before using Accounting Plus—that debits and credits the checking account you want to reconcile.
For example, say you made one deposit and wrote four checks with your checking account before you began using Accounting Plus, and those transactions haven’t cleared the bank yet. In the General Journal Entry window, the deposit amount would appear in the Debit column and the check amounts would appear in the Credit column
Since the general journal entry debits and credits the checking account for the same amount, the journal entry will not affect the balance of the checking account. It will, however, appear in the list of transactions to be reconciled in the Reconcile Accounts window.
Click below for the step-by-step procedure:
To reconcile an account for the first time using Accounting Plus
Like sales tax, payroll taxes need to be paid on a regular basis. Consult your accountant or the appropriate government agencies if you’re unsure about how or when to file payroll taxes.
You can use the Tax Liabilities Report to determine the taxes you owe to the government agencies.
Click below for the step-by-step procedure:
Many procedures in Accounting Plus can also be considered month-end procedures. The following procedures might be performed at the end of the month at your company; we suggest you click on the links below to learn how to perform these tasks.
Most businesses send statements of sales activity to their customers at the end of each month. See Printing statements for more information.
It’s a good idea to be aware of your company’s sales activity and trends on a month-by-month basis. The Analyze Sales window can provide you with a graphical representation of your monthly sales. See Reviewing your sales information for more information.
Tracking your company’s monthly expenses is a wise business practice. See Reviewing your purchase information for more information.
Staying on top of your inventory quantities can make the difference between making sales and losing sales. Therefore, it’s a good idea to check your current inventory levels at regular intervals and be sure your Accounting Plus records match your actual quantities. See Counting inventory items for more information.
If you use the Multicurrency feature of Accounting Plus, you may need to make a journal entry to record your company’s unrealized gains and losses for the current month and reverse the previous month’s entry. See To record unrealized gains and losses for more information.
Accounting Plus doesn’t require you to close accounting periods. The things you do to “close” an accounting period are more for the sake of keeping track of your periodic business activity, so you have accurate historical records to refer to in the future. As a result, the tasks listed below are merely suggestions—but they’re suggestions that may help you out a great deal someday.
Accounting Plus allows you to “lock” the closed accounting period to prevent you from inadvertently making an entry in a month in which you don’t want new entries. This “lock” affects the month you select and all months before it. If, at a later time, you need to make an entry in a month that occurs before the month you selected here, simply change your selection here so that month is “unlocked” and available for transaction entry again.
Click below for the step-by-step procedure:
Month-end Procedures Overview