13.7. End of Month Processing

Ensure all necessary invoices, credit notes and debtor journals for that month have been completed and printed, and invoices updated.

Do a Quick Aged Trial Balance and check that the total balance equals the balance in the general ledger Debtor Control Account. If it doesn't refer to Debtors ATB to G/L descrepancy in the Trouble-shooting section.

Check that the balance in the Debtor Adjustment account is zero. If it isn't refer to The Debtor Adjustment account has a balance at EOM in the Trouble-shooting chapter.

Print out - Debtor Transaction report Debtor Aged Trial Balance Debtor Statements any other debtor sales reports you require (e.g. Sales Tax)

Keep copies of the first three debtor reports (and any others you need) listed in separate folders, labelled clearly with the month they belong to, for reference.

Select EOM processing for debtors, double checking to ensure you have selected the correct month. Be particularly careful never to perform EOM processing twice for the same month.

Ensure all necessary invoices, credit notes and creditor journals for that month have been entered.

Do a Quick Aged Trial Balance and check that the total balance equals the balance in the general ledger Creditor Control Account. If it doesn't refer to Creditors ATB to G/L descrepancy in the Trouble-shooting chapter.

Check that the balance in the Creditor Adjustment account is zero. If it isn't refer to Creditor Adjustment account has a balance at EOM in the Trouble-shooting chapter.

Print out - Creditor Transaction report Creditor Aged Trial Balance Creditor Statements any other creditor reports you require.

Keep copies of the first two creditor reports (and any others you need) listed in separate folders, labelled clearly with the month they belong to, for reference.

Periodically reconcile your Creditor Aged Trial Balance against all your creditor's statements to check that what you think you owe them equals what they think you owe them. Find the cause of any discrepancies and correct them if possible.

Select EOM processing for creditors, double checking to ensure you have selected the correct month. Be particularly careful never to perform EOM processing twice for the same month.

Ensure all necessary stock receipts and stock returns have been entered.

Create Supplier orders if required.

Print out any required stock reports. Keep copies of the stock reports listed in separate folders, labelled clearly with the month they belong to, for reference.

Select EOM processing for stock, double checking to ensure you have selected the correct month. Be particularly careful never to perform EOM processing twice for the same month.

Complete entering all cheques and deposits for that month, and reconcile the bank account to the most recent bank statement.

If you don't run stock you may need to post a journal expensing purchases to cost of goods sold.

Print out - General Ledger Transaction report Profit & Loss Statement Balance Sheet any other reports you require

Keep copies of these reports listed in separate folders, labelled clearly with the month they belong to, for reference.

CHECK - that the balance sheet balances! i.e. that the difference between total assets and total liabilities is equal to the balance of retained earnings bought forward plus the profit/loss figure so far for that year. If it isn't you may have either duplicated or omitted an account on one of your financial reports. Print out a trial balance and check off the accounts systematically until you find where the problem lies. Remember that the Trail Balance must always be in balance.

Read the statements, particularly the Profit & Loss, and check it makes sense to you! Monitoring that the gross profit margin remains fairly constant (i.e. the percentage of cost of goods sold against net sales) is a good way of ensuring that everything is running smoothly. Also make sure that the Year to Date profit or loss figure is the same figure printed in the Balance Sheet. If it isn't you may have either duplicated or omitted an account on one of your financial reports.

Select EOM processing for general ledger, double checking to ensure you have selected the correct month. Be particularly careful never to perform EOM processing twice for the same month.