Year End

Year end is a time when you prepare records for your tax return, and evaluate your business progress. What decisions do you need to make regarding business planning? What do you owe and what are you owed?

When you first set up your business, you must define your year-end date for tax reporting purposes. When determining the end of your business year, the year can end at the end of the calendar year, tax period or fiscal year. As different businesses have different reporting requirements, you should check with your accountant to help determine when you should set up your year-end date.

What are year-end activities?

Year-end activities primarily include tax reporting, to generate the required reports for your federal and provincial tax returns, filing forms for contractors, generating payroll forms, and backing up your data for safe record-keeping.

Sage 50 Accounting keeps up to seven years (up to 100 years (Sage 50 Premium Accounting)) of your company's financial activity details. If you prefer, you can change your settings to clear your company records more often (however, it is a good idea to keep transaction details for at least one year). To complete your year-end tasks quickly, use Sage 50 Accounting to electronically file some of your government forms, and keep a list of required tasks for your year-end activities as a checklist in the Daily Business Manager.

Before you start a new calendar year, do the following:

Check data integrity and back up your company data

Print your calendar year-end audit reports

Print payroll reports (T4 slips and T4 summary, RL-1 slips and RL-1 Summary)

You may also need to update the personal tax credit amounts that are subject to indexing for all employees. If you only want to update the personal tax credit amounts for one or more employees, go to the individual employee records and modify the information on the Taxes tab.

Update your employees' WCB rate.

Before you start a new fiscal year, do the following:

Back up your company data.

Print any reports that you are required to save for that year.

Print your fiscal year-end audit reports and, if you use the budgeting feature, print a comparative income statement, comparing actual amounts to budgeted amounts. Do not make changes in your budget now.

If you file taxes electronically, export your GIFI data.

Make year-end adjustments as recommended by your accountant.

Create a copy of your data to send to your accountant.

Reconcile bank and credit-card statements.

What happens after I finish my year-end activities?

Sage 50 Accounting automatically enters the balances from all revenue and expense accounts into the Retained Earnings account for the new year. It also accumulates balance -forward amounts for projects and makes these balances available for your project reports.

The first time you enter a session date for a new fiscal year, Sage 50 Accounting automatically closes your revenue and expense accounts, moves their balances into the Retained Earnings account for the new year, and sets their balances to zero.

When you advance into a new year, the Fiscal Start date of the company's new accounting year moves to the day after the current Fiscal End, and the next Fiscal End changes to 12 months after the new Fiscal Start date.

Published: June 19, 2017
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