Commerce

New Year Accounts

Posted by Asok K Nadhani on

Click here to get – New Year Accounts Updated post

New Year Accounts

After the Accounts of Current Year is closed, you have to create New Year Accounts, with ledger account Opening Balances of new year, as per the Closing Balance of previous year (Balance Sheet of the previous year) of Real & Personal Accounts.

Starting New Year Accounts

Create a New Company for the New Year (in the same way you created the first company).

  • Create a new Company : Click F3:Cmp Info button and then select Create Company to create a new Company for the next Financial Year. At Financial Year From, enter the Start Date of new Financial year.
  • Create Account Masters : The Reserved Accounts Groups & Accounts Ledgers would be auto created by tally. Now create the Account Groups and Accounts Masters as usual, in the same way you created the masters for the first company.
  • Ledger Opening Balance Entry : If the previous year accounts are finalized, then you may simultaneously enter the Opening Balance of Balance Sheet (Real & Personal) Accounts. Otherwise just create the Ledger Accounts without Opening Balance (leave zero at Opening balance). Later on, when the previous year accounts are finalized, you may enter the Ledger Opening Balance at Opening Balance field, through Ledger Alter option

You may find entry of Ledger Opening Balance at Ledger Accounts, through Alter option under Multiple section (GoT>Accounts info>Ledger>Alter )

Summary

  • In Tally, you do not have to create Journal Entries for Opening Balance (as you do in traditional way), but the Opening Balance is entered in Ledger  Account Masters.
  • When you create separate Tally Company for each Year, to distinguish the respective Company, add the FY at the end of Name. For example, for the Company ABC Academy, enter the Company name ABC Academy 12-13 (for FY 12-13),  ABC Academy 13-14 (for FY 13-14), to identify the Company Properly., as you cannot create multiple Companies of same name,. So, add the identifier at Name. However, you may enter same Name (ABC Academy) at Mailing Name for all the Financial Years.
  • Instead of creating a new Company afresh, you may continue entry for the next year, in the same Company, extending the Financial year. So, you may keep accounts for more than one Financial Year, in one Company (but not recommended). However, sometimes, it may be convenient to maintain accounts of several years in one company (like Personal Accounts) to keep all the things centralized at one place
  • Normally, the Accounts are not complete on the day of close of Financial Year. In that case, extend the Financial Year for the next year and continue working in the same Company for both years. Later on, when he Accounts of previous Financial Year is complete, split the combined data into two parts, one for the Previous Year and another for the current Year. In such case, you do not have to enter Opening Balance for the current Year.
  • On splitting, The closing balance of Previous Year are automatically transferred as Opening Balance of current year. After splitting, you can not make any entry or change for the previous year data. For example, assuming that the Financial Year closes on 31st March, at the end of FY 16-17, on 1st April 2017, you should extend the Financial Year period and continue voucher data entry for 17-18 (1st April 2017 onwards) also in the same Company. When the accounts of 16-17 is complete in all respects, split the Company data which contains data for entire FY 16-17 and some data for FY 17-18, for 1st April 2017 onwards, till date, into two parts, from 1st April 2017. One part containing data for FY 16-17 upto 31st march 2017 (Previous Year), and another part containing data for FY 17-18, from 1st April 2017 onwards (current Year). In the current Year data (FY 17-18), you do not have to enter the Opening Balances. The Closing balances of Real & personal Accounts of FY 16-17 (previous Year), would be automatically carried forward as Opening Balance for FY 18 (Current Year).
  • The Closing Balances of Nominal Accounts of pervious year (FY 16-17) would not be carried in the Opening Balances of current year (FY 17-18).  The Opening Balances of Nominal Accounts of current year would be set to ZERO.
  • You must take a Back of the Accounts of Previous Year Company after splitting, and keep it separately in a safe place. If for any reason, the current year data is damaged, you can restore from the Backed up Data.
  • It is a good practice to keep the previous year data in different Computer, and remove from the computer where Current Year  work is going on for security and any accidental entry / modification in Previous Year Accounts

FAQ: Frequently Asked Questions

Q1: How to create a Company for New Year (e.g creation of Company for FI 15-16 at the end of FY 14-15).

New Year Company creation :Create a new Company for  Accounts of next Financial Year (FY 15-16) in the same way as you created the Current Year Company for  FY !4-15. At Gateway, click  F3:Cmp Info (or press Alt+F3) to get Company Info menu. At Company Info Menu, select Create Company to get Company creation screen.

At Company creation screen.

  • Company Name : At Name, enter the Company name and suffix for the Financial Year  to uniquely create and identify Companies for each Financial Year separately(e.g ABC 15-16)
  • Mailing Name : At Mailing Name, the Company Name entered is carried. Remove the FY suffix (e,g ABC)
  • Financial Year From : .Enter the Start date of the new Financial Year [e.g 1-4-2015]

Press Cntrl + A to save the new Financial Year Company

Click here to get PDF