If your financial year ends on 30 June, the sticky notes on your desk are probably starting to compete for space. EOFY is traditionally stressful, and the additional challenges brought on by COVID-19 have only intensified the pressure. The good news is that with the right preparation, Financial and Assets Year End in SapphireOne can be completed smoothly and methodically.
This article provides a concise, practical guide to processing Financials and Assets Year End in SapphireOne. Please note that Payroll Year End is handled separately and follows a different procedure. A dedicated Payroll Year End guide has already been published and should be completed before commencing Financials and Assets Year End.
You are not required to close your financial year on a specific date, and Year End processing can be completed well into the following year. However, Australian tax law may require an annual stocktake as at 30 June, which is why many businesses choose to process Assets and Financials separately. If you do run these processes at different times, some steps will need to be repeated.
1. Run month end
Before commencing Year End, ensure that all Month End tasks for Financials and Assets have been completed. These include:
- Sending statements
- Reviewing budgets
- Recording asset depreciation
- Lodging BAS/IAS submissions
- Reviewing all essential reports
- Reconciling figures against source documents
In most cases, Payroll Month End and Payroll Year End will have already been completed earlier, as new pay runs cannot be processed in the new financial year until Payroll Year End is finalised.
If this applies to your business, we recommend running Period End Financials and Period End Assets separately. Alternatively, if you are ready to proceed with Financials and Assets before processing the first new pay run, you may run Month End All, followed by End of Year Payroll, and then complete Financials and Assets Year End when ready.
2. Perform stocktake
Australian tax law requires businesses to record the value of all trading stock on hand at 30 June. To substantiate these values, accurate records must be kept for all transactions relating to the purchase, maintenance, repair, and sale of inventory and assets.
A stocktake should only be performed once all inventory transactions for the financial year have been entered and posted. Before commencing stocktake, confirm that inventory quantities and values are finalised.
3. Back up your data file
Before undertaking Financial Year End, it is mandatory to create a master backup of your SapphireOne data file.
Ensure that:
- The backup can be successfully restored
- It is stored securely in a safe location
Do not proceed with Year End until this step has been completed.
4. Conduct data maintenance
To minimise the risk of errors during rollover, perform routine data maintenance tasks:
- Run a Re-Index on the SapphireOne server
- Ensure a Data Compact has been completed
As an added precaution, you may wish to perform a trial Year End using the Single User application with a copy of your data file. This allows you to familiarise yourself with the process without impacting live data.
5. Unlock all periods
All periods must be unlocked before processing Year End (this does not apply to Payroll).
Go to:
Utilities > Controls > Company > Periods and Taxes
Select Unlock All
This must be done for all seven functional areas listed in the drop-down menu.
6. Process year end
You may process Financials and Assets together if all prerequisites for both modules have been completed. To do this, tick Include Assets when running Financial Year End.
Do not tick Include Payroll, as Payroll Year End will typically already have been completed.
The Year End rollover is guided and requires confirmation that all prerequisite steps have been completed before finalisation.
a. Assets
Before processing Assets Year End:
- Produce all required asset reports
- Confirm depreciation is fully up to date
Then go to:
Management > Management > End of Year Assets
- Enter the last period for the year (for example, “12”)
- Tick all completed checkboxes
- Click Continue
Note that depreciation for the new financial year cannot be posted until Assets Year End has been completed.
b. Financials
Before processing Financial Year End:
- Post all outstanding transactions
- Reconcile and print:
- Trial Balance
- Standard Balance
- Income Statement
- Balance Sheet
- Aged Clients and Aged Vendors
- Reconcile all bank accounts
- Run the General Ledger Audit report
- Finalise statements
- Verify all client and vendor allocations
Then go to:
Management > Management > End of Year Financials
- Enter the last period for the year (for example, “12”)
- Tick all completed checkboxes
- Click Continue
7. Check periods
Once Year End processing for Financials and Assets has completed, review your periods.
Go to:
Utilities > Controls > Company > Periods and Taxes
You will need to check the periods for the following functions:
- Assets (after Assets Year End)
- Clients, Vendors, Time Sheets, Sales Analysis, General Ledger, Projects (after Financial Year End)
Confirm that Period 1 reflects the correct start and finish dates for the new financial year.
EOFY involves many moving parts, and it is easy to overlook critical steps when under pressure. By following the process outlined above, you can ensure your Financial and Assets Year End is completed accurately and without unnecessary stress.
If you require assistance at any stage, our support team is available to help. Simply book a support call and we’ll guide you through the process.
You can find year-end deadlines and more information on this ATO page.