Prior year adjustments

Hello, I am still waiting for 2020 year end adjustments from our accountant and have not closed the year. Is my best option for 2021 activity and fianncials to go ahead and close 2020 then enter prior year adjustments when I get them from the accountant? What do you do to stay current when the previous year is still open?

  • Yes, you can close the year.  Then when you have the prior year entries, you will reclose the year.

  • I close the year.  There is a good knowledgebase article about entering prior year entries (once you get them from the accountant) and re-closing. We have our system set up to auto-post entries, but it only does that for two months open at a time, so by now with four months open I'd have two months worth of un-posted entries.  I highly recommend closing and then re-closing!

  • We've done it both ways.  Like you, holding off until the accountant gives us any adjustments, or closing the year as knowleggebase says. If you close the year before the adjustments, my experience has been that not all reports can be "rolled back" a period to reprint the final reports for December after the adjustments have been made because some pull from the current balance, current activity, current year, which is sitting in the new year for January.  You cannot really finish January either because not all January balances will be correct if there are any December adjustments yet to be done.  In my opinion, I'd rather wait for the adjusting entries and not close the year so that all reports in all periods give the correct information.

  • in reply to Rhonda V

    Ah, so what we do to get around that is, I make a copy of the database before I close the year.  So I have an "old" version of the database that I can refer back to that's "as of" 12/31 of the prior year. Then if I need a report from the prior year, I can just access the prior year database.

  • in reply to Siri H.

    Yes, this works for December if you put the adjustments into the copy of the database and into the original database. 

    But still you cannot really report January correctly.  The January Income Statement will be right, but nothing else until the adjustments are entered, posted, and the old year reclosed.

  • Thank you everyone for your input. I appreciate the feedback.

  • in reply to Rhonda V

    I kept the GL open until I could make the adjustments.  I did close AP, AR and Job Cost though.  So entries could post automatically.  Was this a bad idea?

  • in reply to sh2os

    It wasn't a bad idea and you should be fine.