[GNC] How to run Year End Procedures for the Tax Year (UK end 5 April 2023), and start new Data set for the New Tax Year starting 6 April 2023

[G R Hewitt]

*'When I was a systems designer for corporate accounting systems in the
80s, it was entirely anathema for anything to be modified, EVER. The only
way to fix an error, even one made seconds ago, was to add a reversing
entry*
* and then re-add (the correct version of) the original.'*

I was/am a fan of that, especially in a multi-user environment.
Correcting the original entry, especially when you don't know what you are
doing is fraught with problems later on;
especially susceptible to this was Sage Line 50, particularly when people
who shouldn't have but did have 'Manager'
level access.

On Sat, 8 Apr 2023 at 01:36, <paul at kroitor.ca> wrote:

> Hi,
>
> I'm sure many here will consider the following to be a less "legit"
> approach, but I just wanted to chime in to say that I use a very different
> way of dealing with year-ends closings.
>
> Firstly, you should know three things:
>
> 1. All the Close Book function really does is create two split transactions
> on the specified closing date: one that zeroes out all the Income Accounts,
> and another that zeroes the Cost (Expense) Accounts. This allows you to
> start the next fiscal year with zero balances in income and expense
> accounts. The other side of each transaction is booked to whatever Equity
> account you specify when closing.
>
> 2. You can easily reverse the effect of the effect of closing by simply
> deleting the two closing transactions, and you can redo the closing again
> at
> any time too. In fact, if you must "fix" a closed prior year (see note
> below), it's easier to delete the closing entries, make the fix, and rerun
> the closing than it is to manually tweak the closing entries.
>
> 3. I have found some reports do allow stripping out the closing entries --
> and avoiding a nonsensical report -- but others don't have this feature.
> There's a post of mine here a few weeks ago about a five-year history
> report
> that always shows zeros for the first four years, because the report
> includes the closing entries for each year, which (by design) reverses the
> effect of all other transactions in the year. One (messy) approach to
> solving this involves making a temporary copy of the data file, deleting
> the
> closing transactions for all prior years, running the historical reports,
> and finally deleting the temporary copy (note that the approach described
> by
> others here doesn't work when trying to get a five-year cost history).
>
> That being said, there are comments in various Gnucash places
> (Documentation, Wiki, Mailing List histories) to the effect that closing
> books is considered a slightly old-fashioned way of doing things, and
> although perhaps not discouraged, isn't strictly necessary. My own
> preference is to do annual closings on all five sets of books I track. It
> makes some reporting a little trickier to obtain, but on balance I like it
> better.
>
> The other point relates to what I said before about "fixing" a closed prior
> year. When I was a systems designer for corporate accounting systems in the
> 80s, it was entirely anathema for anything to be modified, EVER. The only
> way to fix an error, even one made seconds ago, was to add a reversing
> entry
> and then re-add (the correct version of) the original. Later systems became
> more and more liberal about this -- there are still always audit trails if
> one really must dig into things in cases like fraud -- and now we have
> reached a point where nothing is really locked in stone forever.
>
> Everyone here will have their own policies / morals about what is allowed
> to
> be modified later. In my case, I'm retired and the books I track aren't for
> legal / tax reporting, so I can change prior years and rerun things when
> appropriate. I'm sure many others here have much stricter requirements!
>
> Paul
>
> -----Original Message-----
> From: gnucash-user <gnucash-user-bounces+paul=kroitor.ca at gnucash.org> On
> Behalf Of CJN.... ...
> Sent: Friday, April 7, 2023 7:37 PM
> To: Stan Brown <the_stan_brown at fastmail.fm>; GnuCash User List
> <gnucash-user at gnucash.org>
> Subject: Re: [GNC] How to run Year End Procedures for the Tax Year (UK end
> 5
> April 2023), and start new Data set for the New Tax Year starting 6 April
> 2023
>
> 8 April 2023
>
> WOW - Thanks to all of you who have sent me advice of setting up GNU-Cash
> for a new Financial Year.
>
> Read all your messages - all very helpful.
> Looked at the Help-Contents on Closing (after Year End 5 April) Closed
> Accounts. And started new set of data.
> And entered data for the Transactions of the last few days from New Year
> Start 6 April.
>
> And as far as I can see from Trial Balance, and Income/Expenses Reports,
> all
> data is as it should be!
>
> It's been a long Good Friday for this accounting novice. But I think I got
> there.
> Just hope I remember it all for the next Year End :) - Or I might be back
> for more Help!
>
> Chris
> London
> cjn-international at hotmail.com
>
>
> -----Original Message-----
> From: gnucash-user
> [mailto:gnucash-user-bounces+cjn_international=hotmail.com at gnucash.org] On
> Behalf Of Stan Brown
> Sent: Saturday, April 8, 2023 12:09 AM
> To: GnuCash User List <gnucash-user at gnucash.org>
> Subject: Re: [GNC] How to run Year End Procedures for the Tax Year (UK end
> 5
> April 2023), and start new Data set for the New Tax Year starting 6 April
> 2023
>
>
> On 2023-04-07 14:09, Michael or Penny Novack wrote:
> >
> > The point is, if you ever want to look at the books in their state
> > prior to the 2023 close you don't undo anything. Instead you retrieve
> > the back-up and open a copy of that.
>
> That's certainly possible, and I agree it's much better than undoing
> things.
> But there's a very large caveat:
>
> When you open GnuCash, it opens the file you were working on most recently.
> So you need to be very sure that you have opened the file you intended to,
> after you have finished whatever you wanted to do with the pre-closing
> file.
>
> My advice: when you're working on the pre-closing file, don't close
> GnuCash.
> Instead, close that file, open your current file, and _then_ close GnuCash.
>
> If you're like me (and like several people every month who run into this
> and
> ask about it on the mailing list) you're used to having your current file
> open when you open GnuCash, and you may not notice if some other file
> opens.
>
> That's why I recommend closing the pre-closing file and opening your
> current
> file before you close GC. Sure, if you have to work on your pre-closing
> file
> again, you'll have to open it again, which is an extra step. But at least
> you're never in the position of entering a bunch of transactions and _then_
> discovering that you weren't in the file you meant to be in.
>
> P.S. There's a workaround for this in Windows, and I believe in Linux as
> well. Put the name of your current file on the GnuCash command line (which
> is probably inside a shortcut if you're running Windows), and when GC
> starts
> it will open that file regardless of which file you were working on last.
> (In MacOS, the file on the command line is ignored.)
>
> --
> Stan Brown
> Tehachapi, CA, USA
> https://BrownMath.com
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