Technical Note: Setting Up a Fiscal Year that Does Not Equal 365 or 366 Days

Transcription

1 Article # 1222 Technical Note: Setting Up a Fiscal Year that Does Not Equal 365 or 366 Days Difficulty Level: Beginner Level AccountMate User Version(s) Affected: AccountMate 7 for SQL and Express Module(s) Affected: SM Posting Date: 08/22/2007 DESCRIPTION AccountMate 7.1 offers additional flexibility over earlier versions by allowing users to define the number of days in their accounting periods. The system no longer requires that the number of days in a fiscal year be equal to the calendar year. This TechNote discusses how to set up a fiscal year that does not equal 365 or 366 days. It will also discuss the validations performed by the system when you set up your fiscal year and the feature s limitations. This TechNote will discuss only the steps necessary to set up your fiscal year and provide examples. SOLUTION A. Setting Up Fiscal Year This section will outline how to set up your fiscal year. Refer to the Online Help or the Electronic Manual for more information on each field discussed in this section. The following are some procedures that must be performed when you create the company: 1. Define the number of fiscal periods 2. Define fiscal period interval 3. Define first day of the fiscal year 4. Define current fiscal year For illustration purposes, assume that our accounting periods are based on a seven day span with the period starting on a Sunday and ending on a Saturday. With this setup, the total number of days in our fiscal year is 364. Using our example, the following are the values that must be entered in the Company Setup: Figure 1-1 Add Company

2 When you replace the default values with these values, the system will display a message, Fiscal year does not span one year. Do you want to continue? Click Yes to proceed and enter the values shown above. The succeeding steps must be done after you created the company. In the Utilities menu of the AccountMate program, select the Fiscal Period Table function so you can perform the following steps: 5. Define the period name 6. Define the beginning date for each period 7. Define the ending date for each period The system will automatically populate the Fiscal Period Table with the period name, begin date, and end date for each period. The entries are based on the values you entered for the fiscal period setup when you created the company. Continuing with our illustration, the Fiscal Period Table Setup window will have the following default values: Figure 1-2 Fiscal Period Table Setup

3 Notice that the date range is from 01/01/06 to 12/30/06 only. The End Date of the last fiscal period is computed by the system based on the number of your fiscal period and fiscal period intervals. Figure 1-3. Fiscal Period Table Setup -> End Date of the last fiscal period If you check the next fiscal year, the first period will begin on 12/31/06. Figure 1-4. Fiscal Period Table Setup -> Next Year

4 You can change the period name, begin date, and end date from the default values to any value you choose. The next section will discuss the validations performed by the system when you edit the values in these fields. B. Validations 1. Company Setup Validation When you create your company and the number of fiscal periods you entered is not equal to the calendar year, the system will display a warning message. Figure 2-1 Warning message Clicking Yes will allow you to proceed and define a fiscal period that is not equal to 365 or 366 days. Clicking No will reset the fiscal period to the default value, which is Fiscal Period Table Setup Validation a. End Date cannot be earlier than Begin Date The system does not allow the period End Date to be earlier than the Begin Date for the same period. If you enter an End Date that is earlier than the period s Begin Date, the system will display a message and will not save your entry. See the screenshot below for an example. Figure 2-2 Fiscal Period Table Setup End Date cannot be earlier than Begin Date

5 b. End Date cannot be later than the End Date of the next period The system also does not allow the End Date for a certain period to be later than the End Date of the next period. See below for an example. Figure 2-3 Fiscal Period Table Setup End Date cannot be later than the End Date of the next period c. If Allow Dates to Overlap between Fiscal Periods is marked, the system will accept a begin Date that is equal to the End date of the prior period The system allows overlapping of dates between fiscal periods. Check the screenshot in figure 2-4 for an example. Figure 2-4. Fiscal Period Table Setup Allow Dates to Overlap between Fiscal Periods

6 If you post a transaction with a date that falls on two fiscal periods, such transaction will be posted on the earliest period. Using our example, assume that you created an invoice with an invoice date of 01/07/06. Based on the Fiscal Period Table Setup, 01/07/06 falls under Period 1 and Period 2; however, the system will tag the transaction under Period 1 when it stores the data in the backend. When you generate reports in the subsidiary module, transfer data to GL, or close the period and generate reports in the General Ledger module (e.g. Balance Sheet or Income Statement), the system will treat 01/07/06 as belonging to Period 1. d. If Allow Dates to Overlap between Fiscal Periods is NOT marked, the Begin Date must be the day after the End Date of the prior period Using the same End Date for Period 1 and Begin Date for Period 2 in our previous example, the system will not allow such setting if the Allow Dates to Overlap between Fiscal Periods option is not marked. Figure 2-5. Fiscal Period Table Setup Allow Dates to Overlap between Fiscal Periods NOT marked e. If the Fiscal End Date is changed, allow the user to choose whether the Begin Date of the next fiscal year will be adjusted automatically In the event that you need to change the computed period End Date to cater to the specific needs of your business, you can do so. When you make this change, the system will automatically compute the Begin Date of the next fiscal year based on the End Date you entered. The system validates that the Begin Date of the next fiscal year is always the day after the End Date of the last period of the current fiscal year. Using our data from previous examples, the End Date for Fiscal Year 2006 is 12/30/06. Assume that you want the End Date for FY 2006 to be 01/01/07. When you change in the End Date field the value of the last

7 period of the fiscal year, the system will display a message asking you if you want to adjust the Begin Date for the next fiscal year. Figure 2-6 Fiscal Period Table Setup Change End Date for the last period of the Fiscal Year Clicking Yes will adjust the Begin Date of the first period of the next fiscal year to the date after the End Date of the current year. C. Limitations This section discusses the limitations on the system s capabilities in allowing users to set up a fiscal year that does not equal 365 or 366 days. 1. Does not allow overlapping of dates between fiscal years Although the system allows overlapping of dates, it only allows overlapping of dates between fiscal periods but NOT between fiscal years. For example, the End Date of the last period for your current fiscal year is 01/01/07; and you want the Begin Date of Period 1 for your next fiscal year to be 01/01/07 also. The system will not permit this. You will encounter the message shown in Figure Does not allow gaps in dates between fiscal periods and fiscal years Dates between fiscal periods may overlap, but the system does not allow gaps between fiscal periods and fiscal years. You cannot set up a fiscal period with an End Date of 01/07/06 and a Begin Date of 01/10/06 for the next period. This setup has a gap in dates between fiscal periods (01/08/06 and 01/09/06 are missing). Likewise, the system also will not allow gaps between fiscal years. For example, you cannot have an End Date of 12/30/06 for the last period of your current year, and have a Begin Date of 01/01/07 for Period 1 of the next year.

8 It is important that users know how to set up their fiscal periods and fiscal years in order to maximize the system s capabilities. Knowing that they can set up a fiscal year that does not equal the number of days in a calendar year provides them with greater flexibility and allows them to meet their specific accounting needs. They must also be aware of the validation performed by the system when setting up their fiscal periods and fiscal years, and the limitations on the system s features. Having this information assists them in planning accordingly and using the system in the most efficient possible way to fit their particular business needs. This information is provided "AS IS" without warranty of any kind. AccountMate Software Corporation ( AccountMate ) disclaims all warranties, either express or implied. In no event shall AccountMate be liable for any damages whatsoever including direct, indirect, incidental, consequential, loss of business profits, or special damages, even if AccountMate has been advised of the possibility of such damages. Copyright AccountMate Software Corporation. All rights reserved. Site Map Legal Notices and Terms of Use Privacy Statement Website Feedback