How to Start New Financial Year !

In my last Post I wrote How to close books for Financial Year. Here In this post, I am sharing some basic tips to be taken care while starting the new financial year.

1. This is for those, who believe in Almighty. Seek Blessings of God for year to be profitable, cash flow to stay positive entire year, Employees be engaged and motivated, All evil and negative forces stay away from business, Revenue to grow and Cost under control and finally wish all stakeholders to grow with business including Founders, Promoters, Investors, Vendors, Customers and Employees. You can pray according to your faith, Usually people pay their respect to Lord Ganesha, Maa Lakshmi, Lord Kuber and Lord Chitragupt. After completing worshiping rituals put holy symbol of Swastic on Books and Begin the Journey.

2. First Decision: Continue Same Company in Software or Create New Company. Usually in softwares you can continue the same company for new FY or Create new company. Both options have own advantages and disadvantages. In you need to create new chart of accounts, change in accounting system e.g. from GL base to cost centre base, change in units of measure, change in SKU’s, Integrating Inventory module with Bar Codes or adopt batch accounting, Integrate with other systems like Inventory, Payroll or Taxes, better create new company. Take help of technology, Import all masters into new company and then change as per new requirement.

3. Information: Share all relevant information with appropriate audience e.g. Investment Declaration Form for Current FY, Leave Policy and all relevant policies/documents and information. Budget Plans for each department, Incentive Policies. You can just provide them link or send a mail to refer, if using HRMS System or have automated and uploaded all policies, processes and forms on company’s portal.

4. Chart of Accounts: Review All Accounting, Inventory and Taxation Masters and make changes wherever required. Review chart of accounts, eliminate/block GL’s or Master no more required. Keep in mind all expected changes e.g. the flow of transactions in GST Environment and how it would be different from existing system. For better understanding you can download financials of 2-3 companies from the same industry your company belongs from MCA’s Portal and see how they are different from yours, from notes you can analyse if there is any need to create new GL’s.

5. If you are going to make big changes in system, make presentations, take approval from appropriate authority and inform auditors also, so that no issue is created later.

All the Best !