There is no problem doing what you would like as long as you are certain all entries to the Payroll module are complete for 2022. When you change your Session date to 2023 all of the normal year end activities takes place (closing revenue and expense accounts to retained earnings). You can still go back to 2022 to make an entry by simply entering the actual date you wish to post the vendor or customer invoice. The program will make all of the necessary adjustments to the accounts to make sure the correct numbers are brought forward to 2023. 

I have indicated here using the calendar year, the same thing would happen if your fiscal year end is at any time other than December 31. You can always work in the current fiscal year and the immediate previous year. You should never go back to the previous year after the taxes have been filed for that year.

Hope tis helps

Thank you. Sorry to have to ask another question - I will sign up for some training, but people in my office insist that I have to create a backup file for 2022 file first before I open up 2023 and it is this file that is sent to the accountant. This makes no sense to me because the year end won't be completed for some time. - as you've stated, I CAN open up a new year and still work on the previous year. What exactly is this backup file they are referring to? I would assume that I can make a back up file at any point in time, yes? Thanks for your patience!

There is no need to wait to complete 2022 before opening 2023. When 2022 is complete you may be as much as three of four months into 2023 and the financial information for 2023 would not be available if you wait.

A backup of the data can be made at anytime. Once you are satisfied that you have 2022 complete, make a backup using the backup procedure in Sage 50. This file will include all the previous years (as many as are retained in Sage 50) the 2022 year and as many months as you have of 2023. This presents no concern for the accountant as they will only be using the 2022 data to prepare your year end.

Hope this helps

I agree with everything Alwyn said but I thought I would specifically address your colleague's point

Beverley Tyler said:

people in my office insist that I have to create a backup file for 2022 file first before I open up 2023 and it is this file that is sent to the accountant

You don't have to tell your colleagues this but they must be old.  Way back in last century, there were previous versions of this program called Simply Accounting for DOS and I believe early versions of Simply Accounting for Windows.  These programs did not allow multiple years in a file.  Therefore, if you wanted to continue in a new fiscal year and do silly things like pay your employees and pay for your rent on time, maybe bill your clients so you can still have money coming in, you had to make a copy of the file and move into the new year and keep going.  To complete your previous year end, you had to make duplicate entries in the previous year file to update the year end for the accountants to do the tax return AND post the entry in the current fiscal year (for entries with the previous year's dates).

As Alwyn indicates, this is not necessary anymore (for roughly the last 20 years).  However, I do have one client who, up to recently has continued with this practice in case he was audited.  Then he could send the CRA the file that only included the years audited and they would be complete years.  I believe he is now stopping this extra work like most of the rest of Sage 50 users.

hi Alwyn. can you please clarify. do I close the books at fiscal year end say jan 2023, which will close revenue and expenses to RE.. then i start to record entries for my next fiscal year starting feb 1 2023. . then i can go back and enter more transactions for the previous fiscal, fiscal ending jan 31 2023?

thanks

Hi Gymcat:

There is no specific entry to be made in Sage 50 at fiscal year end. Once you are ready to move into the new fiscal year all you have to do is advance the Session Date to the first day of your New Year. The program will close all the income and expense accounts and move the balance to the Equity account for Prior Year Balance. Once this is completed you can still make entries in the prior year just by dating the entry in the prior year. When this happens, again, the program will make all necessary adjustments to the year end activity, Any new reports using the last day of the prior year will reflect the additional entries.

ok thanks. I will give it a try. 

thank you

Good morning!

I am wondering about your comment regarding the Payroll module.  We need to open a new fiscal year (Aug 1st) and there will be some hours from July that will be in the first two pays in the new fiscal year, will this be ok?

Some businesses will accrue the payroll in the old year, and then reverse the entry in the new year, to account for the payroll expense for July that will not be paid until August. This will be a manual general journal entry.

All of my clients have a pay date on the last day of the month so the accrual is not necessary. Or they are very small and don't consider the amount that could be accrued to be material enough to make a difference.

Thanks Alwyn.  Just to confirm, that I can start the new fiscal year and move the hours at a later date if the company needs too?

Yes, once you have moved to a new year you can always go back to the immediate prior year and make entries. Once your books have been given to your accountant to prepare the year end you should not date any entries in the prior year except the year end adjustments provided by the accountant.

Yes, you can always make an entry in the prior fiscal year in Sage 50. However, once your books have been given to the accountant for the year end preparation you should not make any further entries in the prior year. The exception here would be to make the year end adjusting entries from the accountant only.