MYOB

When you finish off the books for the year in MYOB and hand over your work to the accountant, you want to be confident that you’ve done the best job possible, right? Follow our step-by-step guide and you won’t miss a beat:

1. Complete every transaction up to the last day of the financial year

MYOB software lets you record transactions in the 2011 year without having to finish recording transactions in the old. You’re fine to keep entering sales, purchases, customer payments and other everyday stuff in the new year, and take a few weeks to make sure that all transactions are spot on in the old year.

2. Check your work for the previous 12 months.

• Reconcile all your bank, credit card HP and loan accounts – deal to any ‘stale’ cheques
• Run the GST detail report with a view to finding coding errors. Run the GST reports again for the previous 12 months and check they still agree to that filed. You can still declare unclaimed GST.
• Run the receivables reconciliation report and check the list is correct. Bad debts need to be written off.
• Run the receivables reconciliation report and check you have statements/invoices for each balance.
• Run the inventory reconciliation report. Make inventory adjustments to correct the list.
• Note: The 3 reconciliation reports above must have an out of balance of $0 – check.
• Scrutinize every transaction through your income and expense accounts looking for coding errors.

3. Run your Profit & Loss and Balance Sheet reports for the last 12 months – do they make sense?

4. Make a backup.

5. Supply the accountant with all the information they need.

Different accountants want different stuff and most give you a questionnaire to follow. As an MYOB user, chances are that the company file is all they need which, depending on file size, you can either email or burn onto a CD. Don’t forget to give them a logon ID and password so they can work directly in your file.

If your accountant uses MYOB Accounting Office then you can send the .mye file which allows them to load the full years’ transactions into their program so they can complete your tax return.

6. Protect last year’s data so that you can’t inadvertently make any changes to the year just gone. This is one of the most infuriating things you can do (the punishment is worse than death, that is finding which entries you have added or changed).

7. Wait a few weeks or months for your accountants completed financial reports, then figure out what adjustments you need to make, to your current data. To line up your MYOB to your accountants reports, I would recommend you seek the assistance of an MYOB Certified Consultant.

8. Do a final backup and label it “ABC Ltd 2010.myo”

9. From MYOB, choose [File] Start a New Year. Read each screen carefully before clicking Continue. When MYOB asks about keeping transactions from the previous year, I recommend you say Yes.

10. Whew, all done. Pop the champagne bottle — you’re done!

Final note: If you’re new to MYOB software and some of these points fall into the too-hard-basket, then seek help from your MYOB consultant. If you don’t have one, we can help.

One of the time consuming activities of MYOB consulting is digging for dirt and uncovering entries which have gone astray in clients data files.

This article is one of a series. It will direct you to five places to find your own ‘dirt’ (& clean it up rather than sweep under the mat!).

Follow the five checks below and let us know how you get on..

Check 1

On the “fascinating” subject of bank reconciliations, have you been doing reconciliations on every single bank, savings and credit card and loan account? Do you have an un-deposited funds account with a balance of thousands when it should be zero? Do you have PAYE payable with a debit balance when it should be credit. Check!

Check 2

Go to your bank reconciliation and look at all entries that are more than 6 weeks older than your last bank rec. date.

These are called stale transactions. Investigate each one and sort it out. Are there duplicate entries? Are they genuinely un-presented by your supplier, is the cheque lying in your drawer, is it an accountants end-of-year adjustment, did you pocket the cash or what? Find the culprit, delete or reverse where required.

Check 3

Check post-dated transactions by previewing the Transaction Journal (All) from today’s date to 31/12/2012. Are there any transactions which are future dated (I have found entries dated 20 years in the future!) Find them, re-date them watching for unclaimed GST and/or an income tax deduction.

Check 4

Payments made prior to the invoice date.

Go to Reports, Account, Exceptions, Prepaid Transactions report. Run for your current financial year say 1/4/09 – 31/3/10.

If you have any on the list (likely) then these have payment dates before the invoice date. Shouldn’t happen and ugly if the entry is over year-end usually 31 March. Kick the habit or if you really do have payments before order then start putting your payments against sales orders as opposed to invoices.

Check 5

Debtor and Creditor balances:

Run the Receivables, Ageing Detail report and check each amount is still unpaid. It is easy to confuse ‘Receive Money’ instead of ‘Receive Payments’. On the other side run the Payables, Ageing Detail and check each amount is still unpaid. The likely scenario is to use ‘Spend Money’ and not ‘Pay Bills’.

Some of you have taken formal accounting courses and know the debit/credit rules backward, forward & inside out. But the bulk of you have “fell into” a bookkeeping role when your real profession was a butcher, baker or a candlestick maker.

Quite simply there are 5 account types and each one can go up or down as follows.

Account Type      To increase this account       To decrease this account

Asset                                                                  Debit                                        Credit

Liability                                                              Credit                                       Debit

Equity                                                                 Credit                                       Debit

Income                                                               Debit                                        Credit

Expenses                                                            Debit                                        Credit

Or use the cheats guide to debits and credits

D E A D   C L I C

This acronym stands for Debit Expenses, Assets and Drawings, and Credit Liabilities, Income and Capital.

You apply this DEAD CLIC rule if an account goes up in value. If an account goes down value, you apply the opposite. In other words, if an expense increases in value, then you debit the account (because the DEAD CLIC rule says to Debit Expenses). If an expense decreases in value, then you credit the account.

Remember also that every transaction affects two accounts, one is a debit, the other a credit. This is why we call it double entry (not single entry) bookkeeping.

Do you need to know this stuff? Well not if you use MYOB software. Does it help to know – most certainly it does even if it means just having a better understanding of what your accountant is preaching on about.

Been stung with a late payment fee because you’ve forgotton to make IRD payments?

Use IRD software to create a personalised calendar of tax deadlines for your own business. Copy the following link into your browser to start the due date calculator. In MYOB software, set up recurring entries (with due date reminders) to prompt you to make payments.

www.ird.govt.nz/calculators/tool-name/tools-t/calculator-due-dates.html

Tax Calendar 2010 - sample

Changes in payment date

Due date falling on weekend or public holiday – all tax types

If a due date falls on a weekend or public holiday, the date moves to the next working day. Your return or payment will also be treated as being on time if it’s postmarked on the next working day.

Legislation changes

From the start of the 2009 income tax year (1 April 2008 for most people) GST return filing and payment dates, where they are not already, will be aligned to the income tax balance date. Provisional tax payments will also be due on the same day as the GST payment for that period.

For example, if your balance date is March and you pay GST two monthly, your first instalment of provisional tax will be due 28 August with your July GST return and payment.