https://help.tallysolutions.com/docs/te9rel65/Data_Management/DM_Moving_to_Next_Financial_Year.htm

Moving to the Next Financial Year

Easily and quickly close the books of accounts of a financial year, and  move your company data to the next financial year. You can achieve this in multiple ways in Tally.ERP 9. Handling your tax liability or input credit when company data is split at the beginning of new financial year is also simplified in Tally.ERP 9.

Change Current Period

Other Methods of Moving to New Financial Year

Split Company Data

Create New Company and Import Opening Balances

Create New Books of Accounts

Change Current Period

To move your data to the new financial year, change the current period to:

Continue the voucher entry in the same company data.

Carry forward all ledger balances without creating a new company.

Compare the reports from different financial years.

To change the current period

Go to Gateway of Tally > click F2 : Period and enter the dates.

The Current Period appears as shown below:

When the Current Period is changed, the balances from the previous financial year are carried forward. Retain the Financial year begins from and Books beginning from dates in the Company Alteration screen.

Other Methods of Moving to New Financial Year

You can also do one of the following to move your data to the new financial year:

Split company data , this will help you to:

o Reduce data size.

o Secure old data and start work in a different folder.

o Maintain separate folders for each financial year.

Import the opening balances from the old company to a new company.

Create new books of accounts to start the transactions afresh.

Split Company Data

When you split the data, the original data is retained, and two new companies with unique names and dates are created. You can rename the split company as required, and save the original data in another location.

Before splitting the data:

Ensure the analysis or audits of the books of the previous financial year are complete.

Adjust all the unadjusted forex gains/loss displayed on the balance sheet for multi-currency transactions.

Check the profit and loss account or inventory statements for pending purchase and sales bills, and adjust them to the respective accounts.

To split and move the data to the new financial year:

Take a backup of your data

Verify the data

Split the data

To verify the company data

1. Go to Gateway of Tally > F3 : Cmp Info. > Split Company Data > Verify Company Data .

2. Select the required company.

3. Press Enter to view the Possible Errors screen.

4. Rectify the errors before you proceed to split the data.

To split the company data

1. Go to Gateway of Tally > F3 : Cmp Info > Split Company Data > Select Company .

2. Select the required company for which the data has to be split.

3. Enter or retain the Split from date.

4. Press Enter to split the data. Data will split into two periods.

The synchronisation rules are carried forward in the split data, in both the server and client. The new company name is automatically updated in the Client Rule . If you have renamed the split company, update the same in the Client Rule on the server.

Handling VAT liability and input credit balances when data is split (GCC VAT)

Query : Consider the financial year starting date in your books is 1-Apr-2017. VAT is implemented from 1-Jan-2018 and your first VAT return is to be filed before 25-Apr-2018 for the period 1-Jan-2018 to 31-Mar-2018. How to assess the VAT payable or excess input credit for the quarter if the company data is split on 1-Apr-2018?

Solution : When data is split on 1-Apr-2018, the net VAT payable is carried forward as opening balance of the VAT ledger in the new company. The net amount is carried forward in case a single VAT ledger is used for both VAT Payable and VAT Refundable.

If separate ledgers are maintained for VAT Payable and Refundable, record a journal voucher on 31-Mar-2018 to adjust VAT liability with input credit. This will reflect in the triangulation report. The balance VAT payable or refundable amount is carried forward as ledger opening balance when the company data is split.

To make payment for the VAT payable for the first quarter

1. Go to Gateway of Tally > Accounting Vouchers > Payment .

2. Click S : Stat Payment . In the Stat Payment Details screen,

o Enter the Period From and To dates as 1-Jan-2018 and 31-Mar-2018 .

o Select the Payment Type as Regular VAT Payment . The Stat Payment Details screen appears as shown below:

o Accept the screen.

3. Select the bank ledger.

4. Select the VAT ledger and enter the VAT payable amount manually. It is the VAT payable opening balance brought forward during data split.

5. Enter relevant details in the Bank Allocations screen, and press Enter .

6. Accept the Voucher.

In case there is excess input credit as on 31-Mar-2018, the ledger balance is shown as Excess Input Credit b/f in the new company after data split.

Query : Consider the financial year starting date in your books is 1-Jan-2018. VAT is implemented in your books and you need to file VAT returns before 25-Mar-2019 for the quarter 1-Dec-18 to 28-Feb-19. How to assess the VAT liability or excess input credit for the quarter if the company data is split on 1-Jan-2018?

Solution : In this scenario, if data is split on 1-Jan-2019, VAT Payable or VAT Refund is carried forward as opening balance of VAT ledger. However, the carried forward balance is not shown in triangulation report.

To show the VAT payable (tax liability) in triangulation, record the following adjustment entry:

1. Create a ledger under Current Liabilities and enter the amount of VAT payable carried forward as its opening balance (cr).

2. Alter VAT tax ledger brought forward from previous financial year and remove the opening balance value from the ledger.

3. Record Stat Journal voucher using the adjustment flag Opening Balance dated 1-Jan-2019 to show VAT payable in triangulation.

Go to Gateway of Tally > Accounting Vouchers > F7: Journal .

Click J : Stat Adjustment .

o Select Opening Balance as the Nature of adjustment .

o Press Enter to return to journal voucher.

Debit the ledger created under Current Liabilities and enter the amount brought forward as VAT payable opening balance in Debit column.

Credit VAT tax ledger.

Press Ctrl+A to accept the voucher.

To show the VAT refund (excess input credit) in triangulation, record the following adjustment entry:

1. Create a ledger under Current Assets and enter the amount of VAT refund carried forward as its opening balance (Dr).

2. Alter VAT tax ledger brought forward from previous financial year and remove the opening balance value from the ledger.

3.  Record Stat Journal voucher using the adjustment flag Opening Balance dated 1-Jan-2019 to show VAT refund in triangulation.

Go to Gateway of Tally > Accounting Vouchers > F7: Journal .

Click J : Stat Adjustment .

o Select Opening Balance as the Nature of adjustment .

o Press Enter to return to journal voucher.

Debit the VAT tax ledger and enter the amount brought forward as VAT ledger opening balance in Debit column.

Credit the ledger created under Current Assets .

Press Ctrl+A to accept the voucher.

Create New Company and Import the Opening Balances

If you have created a new company, export the closing balances of the ledgers and stock items of the old company, and import them as opening balances into the new company. You can also import the audited closing balance of the previous year, as the opening balance into the current year.

To export closing balances from old company

1. Go to Gateway of Tally > Display > List of Accounts > E : Export .

2. Select the Format as XML (Data Interchange) and provide details as shown below:

3. Press Enter to export the data.

To import closing balances as opening balances in new company

1. Go to Gateway of Tally > Import Data > Masters .

2. Press Enter to import.

Create New Books of Accounts

You can create a new company and start recording the transactions without any opening balances for the ledgers.

To create new books of accounts

1. Go to Gateway of Tally > F3 : Cmp Info > Create Company .

2. Enter 1-4-2018 as the Financial year begins from date. The same date appears in the Books beginning from field.

3. Create the masters and record transactions.