Choosing the right financial year

Posted By Former_Member over 7 years ago

I am going to start my business this month and would like to record expenses and purchases before starting selling. Problem is purchases of stock and different things have been made from last September. I am not sure as to what financial year should be used to start recording transactions; whether it should be April 2016 or April 2015. If April 2015, do i need to do the year end process to transfer the balance over to this financial year. Please could I have some advice on this?

Paul Morgan over 7 years ago

Hi Sarinya,

We can help with how to set up your financial year if required, however we're unable to advise which financial year you should use, as this ultimately affects your accounts.

You should contact your accountant for advice if you're unsure which financial year to use.
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Former_Member over 7 years ago

Hi Paul, the trade won't start until the next couple of weeks. If I used the April 2016-March 2017 as my first financial year, would the systems allow me to register expenses incurred in the last financial year and what effect would that do to the year-end report when one needed to be produced for income tax purpose?
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Paul Morgan over 7 years ago

Hi Sarinya,

Sage 50 Accounts runs open financial periods, therefore you can post transactions into a previous financial year that has been closed. However, any of these transactions posted to a profit and loss nominal code can cause a previous year adjustment on the Balance Sheet.

Full info on posting adjustments into a previous financial year here.
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Choosing the right financial year

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