Once all the outstanding transactions for the old year are entered into MoneyWorks (and posted), the last period in that year SHOULD BE LOCKED (use the Open/Close Period command to do this). Locking the period means that you won’t be able to inadvertently enter additional transactions into the old financial year. When your accountant has prepared the end of year adjustments (for things like depreciation), the period can be unlocked, the appropriate transactions recorded, and then (once everything has been completed), the period can be closed -- closing is permanent, so it should only be done after the end of year adjustments have been entered.
Before locking the prior year, it is an excellent idea to go through and review any unposted transactions from that year. You need to ask yourself why are they there? Should they be deleted? Once you have given the results to your accountant, you are not going to want to post these, as they will change the results. Also you are not going to be able to close the year if there are unposted transactions in it, which you will want to do once the accountant has finalised the accounts. So they need to be tidied up.
If you have stock (inventory), you will need to do a physical stock take (i.e. go and count up how many of each item you have on the shelf) at the end of the last business day of the year. If you are using the stock system in MoneyWorks 6, you should turn on use the "Start Stocktake" feature to take a snapshot of your stock position as at the end of the financial year (in older versions you should run the "Stock Valuation Report"). You should also take this opportunity to review and possibly revalue the value of the inventoried items.
Once you have assembled all the information for the old financial year (see below), you should arrange for your accountant to look at the accounts, preferably at your premises where all the source documents are handy.
Your accountant is going to want to know the following -- it will save time and money if you have this ready in advance of talking to your accountant:
1. Bank reconciliations: Have your bank reconciliation reports and associated bank statements at hand -- accountants always want these. Note that if you are just entering the cash transactions off your bank statement instead of recording them as they happen, you will not have a record of any unpresented items (i.e. cheques or deposits made which have not been presented at the end of the financial year), so you will need to make a separate list of these.
2. Outstanding invoices: Express and Gold users will be able to use the Aged Payables/Receivables reports to do produce this. Cashbook users will have to do this manually -- basically prepare a list of all invoices that you have received but not yet paid (creditors), and also a list of all the money you are owed (debtors). Remember that you will receive invoices for old financial year well into the new one, so you may not be able to produce a definitive list for several weeks.
3. Trial Balance: Print the "Trial Balance" report from the first period of the old financial year to the last period of the new financial year. Remember it needs to be printed in landscape.
4. Profit and loss: Print the "Profit & Loss for Year to Date" report as at the last period of the old financial year.
5. Balance sheet: Print the "Balance sheet" report as at the end of the old financial year.
6. Ledger printouts of Wages, FBT, PAYE (PAYG in Australia), Entertainment. Use the Account Enquiries command for each of these. Having entered the appropriate account code, click on the Movements tab and set the period pop-up menus to be from the first period of the old financial year until the last period of the old financial year. Then choose Print from the File menu, and set the report option to "Posted Movement by Period".
7. Fixed Asset purchases and disposals: Fixed assets are things like computers, cars, quality accounting software packages. There are a number of pre-supplied asset reports you can use for this (under Reports>General Ledger), but you'll probably get a better list if you use the Account Enquiry command. Click the "Range of Accounts" option and set the Type pop-up to "Fixed Assets". Then click the Movements tab, and continue as previously described.
8. Stock: If you have inventory, you will need to do a stock take (i.e. go and count up how many of each item you have on the shelf). If you are using the MoneyWorks stock system, you should set the "Start Stocktake" at the close of business on the last day of the financial year. This takes a snapshot of your stock levels and values, and you can adjust the count as the physical stock take figures become available.
If you have a version of MoneyWorks before MoneyWorks 6, the stock levels can be adjusted using Stock Creation and Writeoff journals -- you will need to print out the "Stock Valuation Report" first thing on the first day of the new financial year, to show the stock that MoneyWorks thinks it has (these are the figures that you will need to adjust against). This report can be printed from the Products list by choosing Print from the File menu (and needs to be printed in landscape). If you forget to print the Stock Valuation report, it can be reconstituted later using the Stock History report (accessed in the same manner), but this will be much longer and is not quite as easy to read.
9. Work In Progress: If you are running the job system in MoneyWorks Gold, you might have work in progress to account for. As the calculation for this is based on the job sheet items in the Pending list, this should be brought up to date as quickly as possible (and possibly printed out -- it is not possible to reconstitute this information later). You can use Command>Work-In-Progress Journal to create the work in progress journal, or leave it for your accountant to calculate later.
10. Bad Debts: If you have bad debts that you want to write off, these need to be done (at least in New Zealand) before the end of the financial year. To write-off a bad debt, highlight the offending invoice(s) in the Receivables list and choose Command>Adjustments>Write-off. You will be prompted for the account to write off to (you may need to set up a Bad Debts account if you don't have one already).
11. Debtors and Creditors Reconciliation: Your accountant will want to see that the total of your outstanding debtors and creditors agrees with the general ledger totals. Use the Aged Receivable and Payables reports (formally Debtors and Creditors Reconcialiation reports) to show this.
If you have arranged for your accountant to have a copy of MoneyWorks, you can send them your entire file by using the File>Accountants Export command (which will email them a compressed copy). If your account file is large (maybe more than 25-30 MB) you might want to copy them onto a CD and post them, or use a file transfer system such as DropBox. The Accounts Export command can also be used to export your accounts in a format suitable for the specialist accountants practice packages such as Solution 6, APS, and MYOB Accountants Office.
Remember: You should have all transactions in the financial year posted before you print off any final reports for your accountant. This is particularly important for users who use the “Include Unposted Transactions” option in the Bank Reconciliation--in fact we would recommend that you turn this option off for the last reconciliation of the year. if there are any unposted transactions the old financial year, you must ask yourself why they are there.
Finally: If you have the Display filter in the transaction list window set to "Display this financial year", remember that when you open the new financial year nothing will be displayed because there are no transactions yet in the new year. It might pay to have this set to "Display last 3 Periods" for the first couple of months of the financial year.