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TIP: Funds

Year-End Activities, or,
    What You Should Do In December

Excerpt from The Complete Guide to Farm Funds

With Farm Funds, closing a year-end is a simple process of going through a checklist. It is important that you do not close your year until all transactions and adjustments have been entered because, once closed, you will not be able to reopen a year to post transactions. The only thing that you will be able to do in a prior year is print reports or record manual journal entries.

We recommend that you leave your books open until after your tax return has been filed. The only drawback to leaving your books open is that you will not be able to print an Income Statement for your new year because it will still contain last year's figures. You will still be able to record transactions for the new year without affecting the prior year. Farm Funds will ignore these transactions when you close your books because they will not fall within that date range.

To close a year end in Farm Funds:

1. Select Accounting from the menu bar options and click on Year End. The Year End dialog box will appear.
   

2. The Year End dialog box contains a checklist of steps that must be completed before the year may be closed.
   

   1. Make sure initial setup is complete: If this is your first year in Farm Funds, you must complete your initial setup before closing your year. After closing your first year, Initial Setup will no longer be available.
      

   2. Deposit undeposited cash receipts: Confirm that all cash receipts that were marked for deposit as of year-end have been deposited. To check this, switch to your checking tool bar and select the Create Deposit Ticket button from the menu bar. The Deposit Ticket box will appear. Any undeposited cash receipts will be listed. Deposit any amounts from the prior year.
      

   3. Complete any transactions with missing details: All transaction details must be completed before the year is closed. To search for transactions with missing details, open your account register(s) and set the Date Range to cover the entire prior year by selecting Date Range from the View menu. Click on the View menu again and choose the option to Sort by Details. All items with missing details will be grouped together. Enter details for each transaction, as indicated.
      

   4. Reconcile checking accounts: All bank accounts must be reconciled before the year is closed. Transactions cannot be voided and bank adjustments cannot be made after the year is closed.
      

   5. Allocate expenses and income: All expenses and revenues that you want allocated must be allocated to your enterprises before closing your year-end. They cannot be allocated once the year is closed. Note that it is not necessary to allocate every income & expense amount.
      

   6. Adjust inventory quantities and values: All supplies, harvested crops and livestock inventories must be adjusted to their proper amounts before the year is closed.
      

   7. Correct depreciation amounts have been entered: your final depreciation figures must be entered before the year is closed. These numbers should match your tax return.
      

   8. Print out inventory and depreciation reports: Review your printouts for accuracy and completeness. Compare the amounts to your tax return.
      

   9. Print out accrual financial reports: Accrual financial reports include inventories, payables and receivables and best reflect your farm's true profitability.
      

   10. Make a backup of project before year end: The most important step in your year-end checklist is making backups of your project. We recommend making at least two backups of your project on diskettes. Keep one copy off-farm in a safety deposit box or other secure location away from your computer. DO NOT close your year before you have made backups.
       

3. Once you have checked each box in your checklist to indicate that the steps have been completed, click OK to begin year-end processing.
   
   Farm Funds will automatically close all revenue and expense accounts. The difference between these accounts is the farm's net profit or loss, which will be posted to the equity accounts based on the owners' income-sharing percentages. Drawing and family living accounts will be closed into each owner's respective equity account. If your farm is a corporation, revenues, expenses and dividends will be closed into the Unappropriated Retained Earnings account.
   

4. When your year-end is complete, click OK to exit the dialog box.

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Martens Farms has been providing individual training and setup for customers by phone and in person across the United States since 1996. We help you make the most of Farm Works software.

Call us at at 877-585-6761 and ask for Lorra.