Accounting

Period-End Closing

Monthly Closing Checklist

1. Reconcile All Bank Accounts - Match every bank statement line. Book balance should equal bank balance.
2. Reconcile AR/AP - Match all payments to invoices. Unreconciled items should be investigated.
3. Verify Tax Report - Ensure tax amounts match invoices/bills posted this period.
4. Review Trial Balance - Check for unbalanced entries, suspense accounts, or unusual balances.
5. Depreciation - Run depreciation entries for fixed assets.
6. Deferred Revenue/Expenses - Post deferral entries if using this feature.
7. Adjusting Entries - Post accruals, prepayments, and corrections in the Miscellaneous journal.
8. Generate Financial Reports - P&L, Balance Sheet, Cash Flow. Review with management.
9. Lock the Period - Set lock dates to prevent changes (see below).

Lock Dates

Lock dates prevent posting entries in closed periods. Set in Accounting > Configuration > Settings → "Lock Dates" section.

• Fiscal Year Lock Date - No changes allowed before this date for any user.
• Period Lock Date - No changes allowed before this date for non-accountant users. Accountants still have access.
• Journal-Specific Lock Dates - Set different dates per journal.

Fiscal Year-End Closing

1. After the year-end P&L is finalised, post closing entries:

• Zero out temporary accounts (revenue, expenses).
• Transfer net profit/loss to Retained Earnings.

Audit Trail

Accounting > Reporting > Audit Trail shows every posted entry with:

• Entry number (sequential).
• Date and time posted.
• User who posted.
• IP address.
• Journal and reference.

Regularly review the audit trail to ensure data integrity. Export for external auditors.

Best Practices

• Close each month within 10 business days of month-end.
• Lock periods promptly to prevent accidental changes.
• Run the Trial Balance before and after closing to verify accuracy.
• Maintain a closing checklist document and track completion.
• Use the chatter on journal entries to document adjustments for future reference.

Multi-Currency in Quickenerp

Enable multi-currency in Settings to invoice and pay in foreign currencies. Go to Accounting > Configuration > Settings → "Multi-Currencies" section.

Setting Up Currencies

1. Go to General Settings > Currencies → Add currencies.
2. Quickenerp auto-updates exchange rates daily (from a free provider).
3. To update rates manually: Currencies → click a currency → "Update Rate Now".
4. Set Rate Providers: European Central Bank, Yahoo Finance, or custom.

Multi-Currency Transaction Flow

1. Create a price list in EUR → assign to a European customer.
2. Create a quotation/invoice in EUR. Prices use the EUR price list.
3. Quickenerp shows both the EUR total and the company currency equivalent (if different).
4. Exchange rate is locked at invoice creation time.
5. When the customer pays in EUR, the payment is recorded in EUR.
6. Exchange gain/loss is calculated and posted automatically on reconciliation.

Exchange Gain/Loss

• Recorded when the exchange rate at payment differs from the rate at invoice creation.
• Posted to a "Exchange Gain" or "Exchange Loss" account.
• Configure these accounts in Settings → "Exchange Gain/Loss Account".
• Unrealised gains/losses are computed at period-end (manual process).

Multi-Currency Bank Accounts

Create separate bank journals for each currency: "USD Bank", "EUR Bank", "GBP Bank". Each journal has its own currency and bank account.

Taxes in Quickenerp

Quickenerp supports sales tax, VAT, GST, and withholding tax. Go to Accounting > Configuration > Taxes.

Tax Fields Explained

Creating a Tax - Step by Step

1. Go to Taxes → Create.
2. Name: "VAT 20% (Sale)".
3. Tax Type: Sales.
4. Amount: 20%, Computation: Percentage of Price.
5. Set Distribution: The tax amount is posted to a Tax Liability account (e.g. "VAT Collected").
6. Set Included in Price if needed.
7. Save.

Tax Groups

Tax groups aggregate related taxes. For example, a "Sales Tax Group" containing VAT 5%, 12%, and 20%. Reports can show totals per group.

Tax Reports

Go to Accounting > Reporting > Tax Report. This shows:

• Total sales per tax rate.
• Total purchases per tax rate.
• Net tax payable/receivable (output tax - input tax).
• Export for VAT/GST filing.

Withholding Tax

Configure in Taxes → Check "Withholding Tax". Apply on invoices where tax must be withheld at source (e.g. contractor payments). The net payment is reduced by the withholding amount.