Month End Procedures

The Company Data Auditor will guide you through checking and ensuring the records’ accuracy in your company file.

You can use the Company Data Auditor to:

• Display basic information about the company file
• Perform maintenance tasks
• Reconcile your bank and credit card accounts
• Check your transactions for exceptions and audit trail changes

To run the Company Data Auditor, go to the Accounts Command Center and click Company Data Auditor.

Company File Overview

The Overview section verifies the necessary information about your company file, such as where it is stored, file size, last backup date, and more.

From this window, you can perform the following actions:

• Back up your company file – Click Back up and follow the steps on the screen. For more details, visit the Company File Backup section of this guide.
• Verify your company file for errors – Click Verify and follow the steps on the screen. For more details, visit this guide’s Checking your Company File for Errors section.
• Set lock periods for your company file – Click Lock Period and select the date before data cannot be entered.
• Load the latest payroll tax tables – Click Load Tax Tables and follow the steps on the screen. For more details, visit this guide’s Loading Payroll Tax Tables section.

When you are finished with this section, click Next.

Account Reconciliation Review

The Account Reconciliation Review lists your bank accounts, current balance, and last reconciliation date.

To ensure the accuracy of your business records, you should reconcile all your banking and credit card accounts each month.

We will cover the steps to complete your bank reconciliation in Task 2. Click Next.

Transaction Review

The Transaction Review checks all your transactions, based on various criteria, for the selected date range. The Start Date defaults to the first day of the current fiscal year and the End Date to the current session date. You may change the date range if you wish.

The Transaction Review will:

• Reconcile invoice with a linked receivable account – the total of all customer balances is compared to the current balance of the linked accounts receivable account.
• Reconcile purchases with linked payables account – the total of all vendor balances is compared to the current balance of the linked accounts payable account.
• Compare item values with inventory account – the total value of inventory on hand is compared to the current balance of the linked inventory account.
• Scan for future-dated transactions – the company file is checked for any transactions dated after the current session date.
• Scan for prepaid transactions – the company file is checked for any prepaid transactions.
• Scan for deposits paid – the company file is checked for any deposits paid on sales or purchase orders.
• Review audit trail changes – if you have selected the Use Audit Trail Tracking option in the Preferences window (Security tab), the company file is checked for any transactional, tax, accounts, and system changes.
• Reconcile payroll liability payments – if you use integrated payroll, the total of unpaid payroll liabilities transactions is checked against the balance of the linked accounts payable account Payroll Category.

Click Run Review to start the Transaction Review.

A progress status bar appears next to each item in the review during the processing. When the process is complete, the results are displayed as follows:

• A check mark next to the item indicates that no exceptions were found.
• A question mark next to the item indicates there were exceptions. To view details of the exceptions, click Display. This opens a report detailing each exception.

When you are finished with this section, click Next.

Tax Exception Review

The Tax Exception Review checks all transactions based on various tax-related criteria for the selected date range. The Start Date defaults to the first day of the current fiscal year and the End Date to the current session date. You may change the date range if you wish.

The Tax Exception Review will:

• Check for tax amount variances (Sales) – checks for variances between the tax amount posted and the tax amount calculated for the tax codes assigned to sales transactions.
• Check for tax amount variances (Purchases) – checks for variances between the tax amount posted and the tax amount calculated for the tax codes assigned to purchase transactions.

Click the Run Review button to start the Tax Exception Review.

A progress status bar appears next to each item in the review during the processing. When the process is complete, the results are displayed as follows:

• A check mark next to the item indicates that no exceptions were found.
• A question mark next to the item indicates there were exceptions. To view details of the exceptions, click Display. This opens a report detailing each exception.

When you are finished with this section, click Finish. A message appears asking if you would like to print a summary report; select Yes or No to print the report.

To ensure the accuracy of your banking and credit card accounts, you should reconcile every transaction in these accounts to the corresponding transactions recorded in AccountEdge.

If you are reconciling your bank account for the first time since you started using your software, visit the Initial Bank Reconciliation section of this guide.

1. Go to the Banking Command Center and click Reconcile Accounts
2. In the Account field, type or select the account you want to reconcile
3. In the New Statement Balance field, type the closing balance that appears on the statement from your bank
4. In the Bank Statement Date field, type the closing date on your bank statement and press the TAB key. Only unreconciled transactions dated on or before that date will appear in the list

You can manually reconcile your bank accounts by clicking the cleared transactions from your bank statement one by one. You can also reconcile your accounts by importing a digital bank statement file. For more details, visit this guide’s Import a Bank Statement section.

• For each entry on your bank statement, click the column to the left of the matching transaction to mark it for reconciliation. The selected line is highlighted, and the amounts in the Calculated Statement Balance and Out of Balance fields are updated.
• If there are entries on the statement relating to bank charges or interest that do not appear among the transactions on the Reconcile Accounts window, you need to enter these transactions manually. Click Bank Entry, fill in the appropriate transaction details, and click Record.
• Click Reconcile. A window indicates whether your account is ready to be reconciled or out of balance.
• If your account is ready to be reconciled, you can print the Reconciliation report by clicking Print. Once the report is printed, the Reconcile Accounts window reappears. Click Reconcile again to complete the reconciliation process. If you don’t want to print the report, click Reconcile. The transactions you selected are considered cleared and won’t appear in the Reconcile Accounts window the next time you display it.
• If your account is out of balance, the window will indicate the amount by which your account is out of balance and will provide you with some reasons why the account might be out of balance. To correct the out-of-balance amount, go to this guide’s Correct an Out of Balance Reconciliation section.

We recommend you review several reports at the end of each month. You can use these reports to identify and correct any discrepancies in your records and spot any trends in your business.

• Receivables Reconciliation – Lists all your outstanding receivables by customer
• Payables Reconciliation – Lists all your outstanding payables by vendor
• Analyze Sales Customer – Lists your company’s sales invoices by customer
• Analyze Purchases Vendor – Lists your company’s monthly bills by vendor
• Items List Summary – Shows quantity and value of what’s on hand, who you buy from, your cost and selling price
• Audit Trail – If you have selected the Use Audit Trail Tracking option in the Preferences window (Security tab), review changes made to recorded transactions, tax codes, account details, and system settings.
• Profit & Loss Statement – Shows your profit and loss for the selected period.
• Balance Sheet – Reviews your financial position as of the end of a period.
• Trial Balance Summary – Displays the account balance at the beginning of a period, debits and credits posted, and the balance at the end of the period. It can be used to identify incorrectly entered amounts. When reviewing this report, check for:
  • Entries that seem unusually high or low for the account that has been affected
  • Debit amounts for accounts that normally have credit entries and vice versa
  • Unusually high or low ending balances
  • An unusually high or low number of entries for a specific account.
• Balance Sheet Budget Analysis – Lists account balances as of the end of a selected period and the budgeted amounts for them.
• Profit & Loss Budget Analysis – Lists account balances for a selected period, along with their budgeted amounts.
• Statement of Cash Flow – Shows how your cash position has changed over a period of time, what profit you have earned, where you received additional cash, and where your cash was spent.
• Cash Flow Worksheet – Enables you to estimate your short-term cash needs.

NOTE: You may find it helpful to create a batch for your month-end reports and print them all in one go. For help creating and running report batches, go to the Batch Reports section of this guide.

Many businesses send statements to customers with outstanding accounts receivable balances at the end of a month.

To Print a Customer Statement

1. Go to the Sales Command Center, select Print/Email Statements
2. Click the To Be Printed tab
3. In the Statement Type field, select the type of statement you want to print
   • Invoice statements include all open invoices and their corresponding balances. Quotes and orders never appear on invoice statements. If you want to list payments, discounts, and credits on invoice statements, click Advanced Filters and then select the Include Itemized Payment Details for Each Invoice option.
   • Activity statements include all sales invoices, payments, and orders with a customer deposit for a specific period of time; a running balance is included. Quotes never appear on activity statements.
   • Retainer, Escrow, and Trust statements include all sales invoices, payments, and orders within a specific date range.
4. Set the statement date
   • If you selected Invoice as the statement type, type an aging date to display invoices outstanding as of that date. If you want to include only invoices recorded up to the statement date, select the Only include invoices up to Statement Date option.
   • If you selected Activity or Retainer, Escrow, and Trust as the statement type, type the statement date range in the From and To fields
5. Type the number of statements you want to print per customer in the Print field
6. Click in the select column to the left of the customer you are printing a statement for
7. Click Print

NOTE: For additional filter and statement options, including selecting your custom form, click Advanced Filters.

To Email a Customer Statement

1. Go to the Sales Command Center, select Print/Email Statements
2. Click the To Be Emailed tab
3. In the Statement Type field, select the type of statement you want to email
   • Invoice statements include all open invoices and their corresponding balances. Quotes and orders never appear on invoice statements. If you want to list payments, discounts, and credits on invoice statements, click Advanced Filters and then select the Include Itemized Payment Details for Each Invoice option.
   • Activity statements include all sales invoices, payments, and orders with a customer deposit for a specific period of time; a running balance is included. Quotes never appear on activity statements.
   • Retainer, Escrow, and Trust statements include all sales invoices, payments, and orders within a specific date range.
4. Set the statement date
   • If you selected Invoice as the statement type, type an aging date to display invoices outstanding as of that date. If you want to include only invoices recorded up to the statement date, select the Only include invoices up to Statement Date option.
   • If you selected Activity or Retainer, Escrow, and Trust as the statement type, type the statement date range in the From and To fields
5. Select the email template you want to use to send statements
6. Click in the select column to the left of the customer you are emailing a statement for
7. Click Send Email

NOTE: For additional filter and statement options, including selecting your custom form, click Advanced Filters.

Your company’s tangible assets, like office buildings, vehicles, and equipment, lose value yearly. Part of the initial cost for these assets can be allocated as an expense to your company each year that you benefit from their use. The allocation of the cost of a piece of equipment over its useful life is called depreciation.

Amortization is a similar process for spreading an intangible asset’s (like a patent) cost over that asset’s useful life.

There are several methods of recording depreciation. Consult your accountant to see which method is best for you and below we will show you how to record it.

NOTE: If you depreciate your assets at the end of the fiscal year, make this step a part of your end-of-year routine. Consult your tax adviser or accountant for information on when to depreciate your assets.

Your AccountEdge software does not calculate depreciation automatically, but you can record your depreciation figures with a journal entry, even setting it up as a recurring transaction.

To Record Depreciation

Before recording depreciation for an asset, you need to create an asset account and an expense account for each asset you depreciate or amortize. You only need to create these accounts once.

1. Create a new asset account for each type of asset you depreciate. Add the words’ Accum Dep’ (for Accumulated Depreciation) at the end of each new account name. Give the new account a number that allows it to come directly after its corresponding asset account in the accounts list.
   • In the following example, we have a header account, Office Equipment numbered 1‑3100, and a detail account Office Equipment Original Cost numbered 1‑3110. We have created a new asset account called Office Equipment Accum Dep numbered 1‑3120. Notice that the header account shows the current book value of the office equipment.
2. Create a new expense account. You may want to call it Depreciation.
3. Once you’ve determined your depreciation amounts, record journal entries to credit the new accumulated depreciation asset accounts (for example, Office Equipment Accum Dep) and debit the new depreciation expense account. The accumulated depreciation asset accounts will always have a negative balance to show a reduction in the value of the depreciable assets.

After you have completed your month-end tasks, you should lock that period using the Lock Periods feature. This optional feature will prevent you from inadvertently making an entry in a period in which you don’t want new entries. For example, you may have reconciled all your banking and credit card accounts and had your accountant review your financial statements and reports.

1. Go to Setup on the top menu bar, select Preferences from the dropdown
2. Click the Security tab
3. Select the ‘Lock Periods: Disallow Entries Prior To’ option, and select the relevant date

This selection places a temporary lock on the period before that date. If you need to make an entry in a locked period at a later time—for example, you locked May and now want to make an entry in April—you can unlock that period in the Preferences window.