Year-end Procedures

The Spruce software doesn’t require any specific year-end processing; however, companies still need to do some things at or near the end of a calendar or fiscal year.

Here are a few things to consider:

•If your company is performing a Physical Inventory, all adjustments are made to inventory and the ledger based upon the date your company "posts" (finalizes) the counts. If this date is after the end of the year, those adjustments won't appear on reports when run for the prior year. To report your adjusted valuation appropriately, make sure your Physical Inventory is completed and posted before the end of the year.

•Your accountant may want or need specific reports from the end of the year for inventory valuation and other purposes. Contact your accountant and ask them what reports they will need. Your company's management may also want to see information as of the year-end. Depending upon what this may be, you may need to run additional reports at year-end. It’s best to run reports after the close of business on the last business day of the year and before the open of business in the new calendar or fiscal year (see below).
 
Even though most reports can be run for prior date range, the data those reports are based on (items, etc.) is not entirely static. Changes to the data can affect reports run for periods in the past. Changes to group-section, item merges, disabling items, and other activities can change where and if items appear on reports and in which totals they are reflected. For these reasons and if you want/need an actual snapshot of the data (inventory valuation, etc.), you should run reports at the actual end of the period (year-end, for example). Save the report as a PDF and/or print a hard copy. Most reports can be scheduled to run automatically.

•Financial Statements and adjustments (provided by your accountant) are usually done after the end of the year. Consult with your accountant to prepare. The final adjustment cycle is provided for adjusting entries as directed by your accountant. If you use the General Ledger feature, don't close the final “adjustment” cycle until your accountant has reviewed and approved your financial statements (after any adjustments). Closing the last cycle of the year, closes the year preventing any further entries and there is no “undo.”

•At the end of the fiscal year, some companies move their retained earnings balance to a "prior year's retained earnings" account. In addition, inventory adjustments may be necessary if your company uses one or more "beginning inventory" account(s). P&L (Income Statement) balances don't carry over to the new fiscal year (this is automatic, no adjustments need to be done). If you do this, this would typically be done after all other adjustments (which might also affect the retained earnings balances posted to your adjustment cycle).