About closing accounts in general
For the most part, closing accounts in Procountor Solo is done in the same way as in other Procountor product versions. An overview of closing of accounts can be found in this article.
Since Procountor Solo accounting is done on a cash basis, sales and purchase invoice transactions may need to be adjusted on accrual basis. In the following examples, the financial year is assumed to be a full calendar year (1.1.20XX – 31.12.20XX).
To close the accounts of a calendar-year-length financial year, the entrepreneur must first submit the accounting material for each month from the entire financial year. When December’s material has been submitted, the accountant has the majority of the necessary material needed to close the accounts. In addition, the accountant must of course make all the necessary entries with journal receipts when closing accounts.
Sales invoices and closing accounts
In some cases, all sales invoices that would belong to December in accrual based bookkeeping may not have been submitted along with the accounting material to the accountant in Procountor. As a default, the December accounting material submitted by the entrepreneur only includes sales invoices that have been paid and this payment is included in the December bank statement.
The entrepreneur must therefore deliver a comprehensive list of all sales invoices belonging to the closing financial year that have not yet been paid. This list of all open sales invoices is available in Solo:
- From the main menu, click Accounting material > My sales reports.
- Select the dates of the financial year (such as calendar year length 1.1.2020-31.12.2020)
- Click Download the report next to receivables.
This report can be sent to the accountant with the Documents function in Solo (the guide is in Finnish). More detailed instructions on the Solo sales reports are available in this guide.
With the help of this list, the accountant can make all the necessary entries needed to close accounts, using a journal receipt. Instructions on how to create a journal receipt can be found here. After these sales invoices are paid later during the following financial year, the accountant must make the necessary accounting entries on the bank statement. For example:
- A payment for an invoice belonging to the previous financial year (whose profit and loss effect is recorded on a journal receipt itemizing sales invoices, dated December 31, 2020) will be shown on the first bank statement of the first month of that financial year (i.e. January 2021 bank statement).
- When the entrepreneur later submits the January 2021 accounting material to the accountant, the accountant makes an entry on the bank statement that clears this payment from receivables (that were recorded at the end of the previous financial year with a journal receipt).
Purchase invoices and closing accounts
As with sales invoices, all sales invoices that would belong to December in accrual based bookkeeping may not be available to the accountant in Procountor if the payments for these invoices was not made in December before the end of the financial year.
As a result, the entrepreneur must deliver a comprehensive list of all unpaid purchase invoices that belong to the financial year about to be closed. A list of such purchase invoices cannot be directly obtained from Solo, and so the entrepreneur must make a list of all these invoices and submit it to the accountant using, for example, the Documents function in Solo (the guide is in Finnish).
As with sales invoices, the accountant can make all purchase invoice entries with a journal receipt. Instructions on how to create a journal receipt can be found here. After these purchase invoices are paid later during the following financial year, the accountant must make the necessary accounting entries on the bank statement. For example:
- A payment for an invoice belonging to the previous financial year (whose profit and loss effect is recorded on a journal receipt itemizing purchase invoices, dated December 31, 2020) will be shown on the first bank statement of the first month of that financial year (i.e. January 2021 bank statement).
- When the entrepreneur later submits the January 2021 accounting material to the accountant, the accountant makes an entry on the bank statement that clears this payment from payables (that were recorded at the end of the previous financial year with a journal receipt).