Sage 50 YEW Checklist

Financial Year-End Checklist

Step 1: Complete all transactions for the year

Before you run your final financial reports, all transactions must be completed for that year.

Step 2: Fixed Asset year-end procedures

The following information applies only if you are using Sage 50 Fixed Assets with Sage 50 Complete Accounting or higher.

Calculate and post fixed assets depreciation amounts

Depreciations must be calculated and posted to the General Ledger before closing the fiscal year in Sage 50. Final depreciation amounts for the current tax year must be included in the Sage 50 General Ledger and financial statements before closing the fiscal year.

Depreciation should be calculated in Sage 50 Fixed Assets every accounting period.

To calculate and post fixed asset depreciation amounts:

1. Open Sage 50 Fixed Assets by either going to Maintain > Fixed Assets within Sage 50 or by clicking the Sage 50 Fixed Assets icon located on your desktop.
2. Make all necessary additions, changes, and dispositions of assets you have set up.
3. Go to File > Edit Company. On the Book Defaults page, verify that the Fiscal Year-End is accurate.
4. To calculate depreciation, go to Depreciation, Depreciate and choose the Group, Book, and month you will be depreciating through and choose OK. Review the depreciation amounts for accuracy.
5. Once you have calculated depreciation, you can now post. Go to Depreciate > Post Depreciation. Select the appropriate Group, Book, Period Posting Date and Journal Entry Date. Click the Preview button to preview the journal entries. After reviewing the information, click the Post button to post the journal entries to Sage 50.
6. Repeat the above steps for each accounting period through the end of the tax year.
7. From the Fixed Assets Reports menu, select and print all reports needed for 2015 or the year you are ending or about to close in Sage 50.
8. Once you have finished, make a backup of your Sage 50 Fixed Assets data. From the File menu, choose Company Utilities, then select Backup Company. If prompted to close the current company, click Yes. On the Backup Companies window, select the company or companies you wish. Click Next. In the Save in box at the top, select the location where the Sage 50 Fixed Assets Backup file (.BBK) will be saved. Finally, enter a File name for the .BBK file, and click Backup.

Step 3: Reconcile General Ledger accounts to bank statements

You cannot reconcile accounts (for example, checking or credit card accounts) whose bank statements are dated in a closed fiscal year. Therefore, it is recommended that you reconcile these accounts prior to closing the fiscal year.

If you choose to not reconcile accounts using previous bank statements, the items will be available to clear in the new fiscal year. However, the account reconciliation will be difficult to manage and audit.

Step 4: Print year-end reports to keep an historical copy of your information

Print reports to keep an historical hard copy of your accounting information (depending on your company requirements, not all these reports may be needed). These reports will act as a hard copy of your historical Sage 50 information and they can be helpful during audits.

List of recommended reports

Accounts Receivable—Sales Journal, Cash Receipts Journal, Customer Ledgers, Customer Statements, Aged Receivables, Taxable/Exempt Sales, Invoice Register

Accounts Payable—Check Register, Aged Payables, Vendor Ledger, Purchase Order Journal, Purchase Journal, 1099 forms

General Ledger—General Ledger Trial Balance, General Journal, General Ledger report

Financial Statements—Balance Sheet, Income Statement, Cash Flow Statement

Payroll— Payroll Check Register, Quarterly Earnings Report, Yearly Earnings Report, Payroll Tax Reports, State Quarterly and Yearly Forms and Federal Forms (940, 941, W-2, and W-3).

Inventory—Inventory Valuation Report, Item Costing Report, Inventory Unit Activity Report, Inventory Profitability Report

Jobs—Job Ledgers, Job Profitability Report, Job Register

Notes:
The Payroll Reports cannot be printed for a closed payroll year.

Step 5: Review reports and make adjustments as necessary

Usually in the last accounting period of a fiscal year, you need to make adjusting entries. These might include the following:

• Write off customer bad debts
• Record old outstanding checks re-entered into the bank account as miscellaneous income
• Verify that fixed-asset purchases and dispositions have been properly recorded
• Record depreciation expenses
• Record a physical inventory count and compare to Sage 50 quantity on hand
• Manage outstanding notes payable and receivable items and recording- or adjusting-interest expense or income

Once the above adjustments have been made (if necessary), you are ready to begin closing the fiscal year. The type of adjustment required depends on where in Sage 50 the correction needs to be made.

• General ledger adjustments are entered in the General Journal Entries window
  (Tasks > General Journal Entry)
• Inventory adjustments are entered in the Inventory Adjustments window
  (Tasks > Inventory Adjustments)
• Payroll adjustments can be made through Payroll Entry
  (Tasks > Payroll Entry)
• Accounts receivable adjustments can be made through Sales/Invoicing or Receipts
  (Tasks > Sales/Invoicing or Tasks > Receive Money)
• Accounts payable adjustments can be made through Purchases or Payments
  (Tasks > Purchase/Receive Inventory or Tasks > Payments)

After you have made the necessary adjustments, reprint any affected reports so that you have a correct copy.