How to extend the financial year

Summary

How to extend the financial year to longer than 12 months in Sage 50 Accounts.

Description

When setting up a company, you enter the starting month of your financial year. Your year then runs for 12 months.

To extend it beyond 12 months, follow this step-by-step process in your software.

Resolution

Before you start

▼ Archive your company data

To run management reports for your original financial year, archive your data before you extend the year.

▼ Need to produce Prior Year or Budget reports?

Running the Financial Year Change option removes all prior year and budget values from your nominal codes. the software uses this information to produce Prior Year or Budget reports.

You can retain the values for standard budgeting and prior year values by exporting your nominal ledger.

To do this:

Go to Nominal codes, select Reports then select Nominal details.
Select the Nominal Record CSV (Extended) report then select Export.
Change the Save as type: to CSV Files (*.csv), then click Save.
Click OK on the Criteria Values window.

Follow the steps in the Move the brought forward values section, adjust the values to the new months, then import the amended data.

What changes happen?

When you extend your financial year your software will:

Rebuild the nominal code balances based on your audit trail transactions

TIP: View these balances on the Details tab of your nominal records.

Recalculate the customers and suppliers year to date turnover figures based on your audit trail transactions
Recalculate the monthly sales balances on the product records on your product transactions

Change financial year to new year end date

▼ Watch the video

▼ Follow the steps

In our example, the current financial year starts in April 2024 and ends in March 2025. The new year is to end in June 2025, to give us a 15-month year.

To get the correct year end date of June 2025, ensure the start date is 12 months earlier, July 2024.

This table shows the changes needed:

Year	20	20	20	20	20	20	20	20	20	21	21	21	21	21	21
Month	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun
Current	Start											End
New				Start											End

Check your data is in good health.
Back up your data.
Go to Settings, select Financial Year, then click Change.
Click Yes then Yes again.
Set the Change Financial Year month to your new start date, then click OK.
To confirm, select Yes, click OK then OK again.

That's it, your financial year now has the correct end date. You can now follow the steps in the View the brought forward Trial Balance section.

View the brought forward Trial Balance

Advancing your financial year start date creates brought forward values in your profit and loss nominal codes. Move these to month one of the new year. In the example, move the balances for April, May and June into July.

Year	20	20	20	20	20	20	20	20	20	21	21	21	21	21	21
Month	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun
Current	Start											End
New	B/fwd	B/fwd	B/fwd	Start											End

Run the brought forward Trial Balance report to identify these values:

Go to Nominal codes then select Trial balance.
Select Preview in Print Output then click Run.
Select the period Brought forward then click OK.
Print or save a copy of the report.

You can now follow the steps in the Move the brought forward values section.

▼ Where are my profit and loss nominal codes? >

By default, the profit and loss nominal codes are 4000-9999.

To check this:

Go to Nominal codes then select Chart of accounts.
Double-click the Default Layout of Accounts, then check the nominal codes in the Profit & Loss tab.

TIP: Run the Trial Balance for month one now if you need a copy for your records.

Move the brought forward values

You can now post a reversing journal to move your brought forward profit and loss values into month one.

Year	20	20	20	20	20	20	20	20	20	21	21	21	21	21	21
Month	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun
Current	Start											End
New	B/fwd	B/fwd	B/fwd	Month 1											End

Go to Nominal codes and select Journal entry.
Enter a Reference and enter the day before your new month one in Posting Date. For this example, use 30/06/24.
Using the brought forward Trial Balance, enter the values in the Journal Entry window to clear profit and loss brought forward balances. For example, enter a debit balance from the report as a credit.
To balance your journals, post the remaining value to Retained Earnings nominal code, 3200 by default.
For example, if the balance is 3,500.00 Debit, enter a Credit of 3,500,00 using the nominal code 3200.
Click Save.
Select Journal reversal and use the first day of your new financial year, in our example 01/07/24. This posts the values as they appear on your brought forward Trial Balance.
Click Save.

You've now extended your financial year. As a final check, run a brought forward Trial Balance to ensure there are no profit and loss values.