Now that we have entered December, your company is most likely thinking about your year-end processes and closing out the current fiscal year to get ready for the next. The fiscal year is significant for your company’s accounting purposes and for preparing financial statements. Simply stated, it is a one-year period that companies use for financial reporting and budgeting.
Commonly, a fiscal year corresponds with the calendar year – beginning on January 1st and ending on December 31st. If your company’s fiscal year does not align with the calendar year, that’s ok. In fact, Successware allows customers to use any month as the start of their fiscal year. Our system even allows customers to use a “4-4-5” accounting system with 13 fiscal periods if they so choose.
One of the many benefits of Successware is that your accounting is hosted directly in the platform, giving you access to all your year-end information. We also know accounting isn’t everyone’s cup of tea, so we have tried to make closing out your fiscal year in Successware as painless and straightforward as possible.
You should be keeping good records of things like your income statements and balance sheets throughout the year to prepare accurate financial statements. Good recordkeeping helps you monitor the progress of your business, prepare financial statements, identify sources of income and areas for growth, keep track of deductible expenses, and prepare tax returns.
Poor recordkeeping could lead to severe consequences for your company. Your business could end up paying extra taxes, face an IRS audit, receive criminal penalties for improper licensure, and so on.
Keeping accurate records and recordings your accounting puts your company in a position to succeed and grow. Furthermore, closing each fiscal period and fiscal year accurately is essential to your overall recordkeeping. Successware makes this process easy.
Closing a fiscal period prevents any further accounting transactions from being made within that period’s specified time frame. In preparing to close your fiscal period, you’ll want to follow our period end checklist and ensure that the following items are entered, closed, and/or reconciled as appropriate:
- Accounts Receivable
- Accounts Payable
- Account Register (e.g., undeposited receipts, petty cash, bank and credit card accounts)
- General Ledger
Once the above is complete, Successware’s Reconcile Utility identifies and helps you resolve any discrepancies among your Accounts Receivable, Accounts Payable, and Pending Payables. This is a great time saver!
After you have completed all the standard month-end tasks and the last fiscal period has been closed, Successware will calculate your Income Statement accounts and post the results to your Retained Earnings account. At that point, all income account balances are zeroed out and you can activate the new fiscal year!
If you have any questions about closing out your fiscal year in Successware, please reach out to our support team at 888-828-0170.