[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]

Mea Culpa
Concerning the year end discussion, which I have been following,
my input was to mention that the manual stated that if you close the books
the report totals may be different, and I postulated that this was so as I
had
tested it and indeed they were different QED.
However, as the discussion progressed, I began to doubt my conclusions and
went to
investigate further, and found that after 'Closing' the books, then opening
each report and running a 'Clear All' accounts and then 'Select All'
accounts then 'Apply', the reports- P&L, TB and BS all reported correctly.
This is most pleasing, as I am definitely a 'Close the books and draw a
line under them' person, and it was a 'mind splinter' not to have
everything zeroed at start of year.

On Sat, 8 Apr 2023 at 09:12, G R Hewitt <hewittgr at gmail.com> wrote:

>
>
>
> *'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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