Sage hints and tips: planning for year-end

Our latest helpful hints and tips for Sage 50 Accounting will help you to plan for year-end

Is it time to start planning for year-end?

There is a point at which one year needs to be closed and a new one opened. When is the right time? And what do I do with the journals from my accountants?


The year-end routine will clear all Profit & Loss balances to zero and open a new 12 month period.

Thereafter the system will accept transactions dated in the prior year. If the entry is posted to Profit & Loss codes they will report as a prior year adjustment on the balance sheet.

Lock date

Settings include a “lock date”. This allows the administrator to set a date prior to which only authorised users will be able to enter new transactions.

Consider using lock date to close an individual month or to avoid prior year adjustments.


At any one time Sage 50 has a single 12 month period open. The system uses transaction dates to allocate data to relevant periods, typically months. When a given accounting period has passed the system will flag a warning (which can be turned off) that transactions are being posted outside the open date range.

It is important to keep your accounts open long enough after a year-end to capture supplier invoices and to complete the reconciliation of your control accounts. Posting current transactions outside the open date range is not a problem and in most cases is to be encouraged so that you do not create a backlog.


It is not possible to run the standard financial reports for a new year until the old year has been closed, so the earlier you can  do this, the better. For many businesses it is sufficient to keep the accounting period open for one month after the year end. The right decision for you will depend on the following:

  1. all sales have been invoiced;
  2. stocktake has been reflected and stock valuation adjusted accordingly (including consideration of slow moving or obsolete stock);
  3. all bank accounts have been reconciled and action taken in respect of any old outstanding items (especially if any receipts more than a few days old);
  4. all supplier invoices have been received and entered;
  5. PAYE and VAT liabilities correctly reflect the latest P32 and VAT Returns

Once satisfied the transaction posting and reconciliations are complete you are ready to close the old year and roll forward into the current year.

Year-end procedure

Tip: change your system date within Sage back to the year-end date before running year-end. This will ensure future dated transactions are not included. Before running the year-end ensure you have taken a pre-year-end backup both as a safeguard and to provide to your accountant. Ensure that the year end includes creating an archive, this is an electronic copy of pre-year-end which you can access in read only mode. Very helpful for running forgotten reports!

Year-end journals from your accountant

There can be some confusion when you receive adjustments from your accountant. The following rules should help you get it right:

  1. All end of year adjustments should be posted to “balance sheet” accounts and dated “the last day of the old year” (the system will flag that the date is outside the current year, this is normal and OK);
  2. Never ever accept journals coded to a control account (such as codes 1100, 1200 or 2100), in such cases consider posting to a separate provision account, ask for more information, then enter an invoice, credit note, receipt, or payment, with the nominal code set to the provision account;
  3. Once entered you can check the outcome by running the “brought forward” trial balance report in financials. The balance on code 3200 should match the reported profit or loss in your final statutory accounts; also note that there should be no values in any income or cost codes;
  4. The final step is to enter a journal, still dated the last day of the old year, to move the balance on code 3200 to retained reserves (usually code 3100) and to ensure last year asset additions and depreciation charges have been moved to cost and depreciation brought forward codes (if shown separately).
Using foreign currency bank accounts

Take care to enter balance adjustments using the normal receipts and payments functions in currency. The only journals in base currency can be for exchange rate differences (but much better if these are entered using the revaluation wizard each month end).

For more information

Please contact Andrew Bagley or call us on:

01483 416232