Overview

Financial Year Ends and Periods 

A new area for configuring the financial year has been added to Firm Settings. This is accessible only by users with Unrestricted Setting access. 

From within the Financial year and periods area, a period date may be set and a financial year closed.   

Financial Periods

Please note, use of the financial period date feature is optional. 

EvolveGo allows financial periods to be closed, after which the financial figures for that period are locked. This approach differs to journal locking in that postings may still be back dated to a closed financial period, however, back dated postings are allocated to the current open financial period.  

The financial period works by EvolveGo storing both the transaction date and financial period date for every transaction, with the period date being allocated automatically by EvolveGo. Financial reports in EvolveGo run based off the financial period dates and not transaction date.

To close a financial period enter the first day following in the period date field, i.e. to close March 2024 enter the period date as 01.04.2024.  Any postings dated prior to 01.04.2024, will be allocated the period date of 01.04.2024 ensuring reports run as at March 2024 will not include the postings made after March was closed.  

A financial period may be reopened simply by changing the date.

*When a financial year is closed, if the current financial period date is less than the year end date, then this will be updated to the first day of the new financial year. This means a financial period within a closed financial year cannot be open. 

Once the financial year has been closed it will not be possible to reopen a financial period within that year, instead a post year end adjustment tool has been introduced to allow for any required adjustments (please see below for more detail).

Closing the Financial Year

When a financial year is closed, an automated journal transaction will be created to clear down each individual Profit & Loss general ledger account to zero, moving the total balance to the retained earnings balance sheet account. 

Upon closing a financial year for the first time, a new financial year will be opened.  The new financial year will start the day following the previous financial year being closed, defaulting to a 12 month financial year. However, it will be possible to alter the financial year end date (prior to it being closed). This will allow firms to change their year-end where necessary, allowing either a shorter or longer financial year to occur.

It will not be possible to edit the start date of a financial year, as this will be fixed as the date following the previous year end. 

*Up until it is closed, it will be possible to alter the start date of the very first EvolveGo financial year.   

Post Year End Adjustments 

A financial year may be reopened and in order to adjust the closed financial year general ledger account balances. 

Once a year is reopened, adjustments can be processed via the ‘record posting’ option within the financial years and periods area. This will open a privileged version of the journal transaction screen, which will back date to closed financial periods.

After the required adjustments have been made, reclosing the financial will trigger a further automatic clear down transaction on any updated Profit & Loss general ledger accounts. 

Multiple financial years may be reopened if required, but must be done so in reverse order. i.e. 2022 must be reopened before 2021 can be reopened. Reclosing the financial years must then be done in chronological order. 

Reporting  

For reporting purposes, automated clear down transactions will be omitted from the Profit & Loss report (by way of default filter) to provide accurate year to date reporting. To include the automated clear down transactions, simply remove the filter.  

In contrast, for the Balance sheet, the automated cleardown entry to Retained Earnings will be included in the report to provide an accurate position. 

When reviewing the General Ledger, the automated clear down transactions have their own unique posting event type, which allows them to be filtered on, using the ‘Posting Events’ filter chip. 

Current Year earnings Account 

You will notice that there is a Current Year Earnings Account in the Balance Sheet. This account reflects a virtual calculation of the current year's earnings at any time. When a year is closed and automated year end journal is posted, this account becomes zero. 
 
 

Locking Journals 

This above process remains independent of the ability to lock journals and accounts.  

The Office Journal can be locked to prevent transactions from being recorded. This process is optional based on your preference. The Journal can be locked as follows. 

1. Select General Ledger from the navigation menu and select the relevant Office Journal. 

2. Select Lock Journal from Journal Actions menu.

3. Select the date by clicking on the calendar icon from the date drop down menu, no transactions will be able to be recorded on or prior to the date selected.

4. Select Save & view the entry in the ‘Locked Date’ column of the General Ledger screen (in 1.) .