Financial Year End Closing Process in EZTax GST Accounting Software

A closing balance is the amount which remaining in Business account at the end of the year. The reason for closing accounts is to ensure that temporary accounts likerevenue and expenses will become zero balance at end of the year and permanent accounts like assets and liabilities will carry forward with closing balances in new financial year.

There are various tasks like Bank Reconciliation, Aging of Debtors, Creditors, Stock Valuation, preparation of Financial Statements, Tax Payments etc. that needs to be taken care by the business.

Steps for Closing the Books

1. Identify the transactions

The business account must identify the transactions made during the financial year, like sales, purchases, expenses, payments made and receivables during the year.

2. Record the transactions in software

Next step is recording the transactions in software. The entry’s generally based on receipt of invoices, Bank statements, recognizing the expenses and petty cash expenses entry.

3. Reconciliation of bank statement

Must reconcile at end of the year Bank statement with entry’s made in software.

4. Cross check with GST Portal

Sales and purchases which are entered in software must cross check with GST Portal for better accounting.

5. Review the transactions

Make sure that all the invoices, purchases, expenses & vouchers are entered in the system. Then go to 'R & R' menu and click on Reports. You can review & print or download the transactions report, Profit & Loss, Cash/bank book and stock report for the respective financial year for future use.

Note: The system will maintain the past transactions even after start entering the new year's data.

Before taking above reports, make sure you run bank reconciliation, check aging of debtors and ageing of creditors, physical stock verification and corresponding stock adjustment entries, pay taxes as per prevailing laws such as TDS, Advance Tax if applicable, process monthly / quarterly GST returns.

Action Go to Return Center >> Reports

6. Run Month Close process for March

Run Month Close process for the March month to close for the whole financial year. If you want to close the old financial year, select the March month for the respective financial year. After you click month close button, the process will freeze all the previous transactions to limit the edit capability. Also, no new transactions can be entered for the period of closing.

Once the process is successfully completed, closing balances for the period will be automatically considered for the new period.

Action Go to Return Center >> Month Close

7. Check the Balance Sheet for the new year

Finally, all your business accounts get settled and assets and liabilities accounts will be carried forward to the new financial year. The closing balances of assets and liabilities of old financial year will be transferred to the current financial balance sheet as opening balances. Check them and record by printing them.

Action Visit Return Center >> Balance Sheet

8. Reset Invoice Number Series

EZTax.in GST Accounting software continues the same series of invoice numbering as of last financial year. If you want to start the new invoice number sequence or reset to start from 1 for the new financial year, follow the below action and change the invoice number starting letters and numbers.

Note: Once you start with an initial number or series or a combination of both, it is strongly advised to follow for the whole financial year as the GSTN mandated to provide missing invoice numbers part of the GST Filing.

Eg. Suppose your last Invoice number for Apr 2019 was '2019/100' and you changed the number to start from '2019/200', this creates 99 missing invoice numbers in your GST Return file for the month of Apr 2019. Such changes may have consequences with the Tax Authorities.

Action My Business >> Detailed View >> Invoice Number setup

9. Greet your customers & show gratitude

Majority of the Small & Medium businesses do depend on the customer relationships more than the branding. It's time to connect with your customers / clientele to say, "Thank you!" and wishing them the very Best for the new Year, if possible, offer a discount code and/or introduce new products / services through eMails and SMSs.

Now you can send SMS messages, and mails to all your customers and suppliers through Contact Master, an easy & convenient way.

Note: Check your SMS Credit to make sure you have enough for the day you want to send. If not, contact gst@eztax.in to request for new credits. generally, each SMS credit cost ~15 paisa. Check w Team EZTax.in to see the prevailing charges for such.

Action Sales >> Masters >> Contacts >> Customers & Suppliers SMS & e-Mails

In case of any questions, you may post your query to gst@eztax.in or chat with us.