You are probably getting to that time when you need to start thinking about closing 2006. I have been getting a lot of calls of the implications of closing a year and best practices.
At this time of the month, you are probably about to close December. I would not do this. If you have, you can always reopen December. Get everything in order for December but do not close it. You want to leave that month open so you can enter your accountant's adjustments.
Instead of closing December, go to System Settings --> Other and change the No Accounting Entries On or Before to 12/31/2006. This will prevent anyone from entering in anything in 2006. Once you get the adjustments, change this date to 11/30/2006 and make make the necessary corrections. The next step would be to close December and then 2006.
The PCLAW CIC Training Manual gives this description for what the End of Year Does:
"The end of the year process will create entries to zero out all income and expense accounts. In addition to this, draw accounts will be closed off into the partner equity accounts (if a partnership) and income (or losses) will be allocated to the partners equity account as designated in the Lawyer and Rates table for each partner. If there are no allocations, then income will be put into the default equity account (3000)."
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