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© Herts for Learning 2017

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CONTENTS

Topic Page No

General Background – Academy Year End Returns 2

Preparing for Year End on FMS:HousekeepingSystem ReconciliationYear End System Check report

489

Correcting errors on Year End System Check:Structures Need Updating

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Before Posting Accruals 13

Preliminary Year EndPreparing AccrualsPosting Accruals

1617

Reports to Print and Keep 18

Check List 19

SIMS FMS6 USER BULLETIN No. A38Preparation and Processing Year End for Academies

2017-2018

This bulletin offers guidance on the transactional process of year- end on FMS6 and should be used in conjunction with advice

provided by your external auditors.


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Academy Year End ReturnsAs Academies you must submit audited accounts for the period ending 31st August 2018 to the ESFA by 31st December 2018.

Further information is available in the Academies Accounts Direction 2017-2018 on the ESFA Website https://www.gov.uk/guidance/academies-accounts-direction

In addition you will need to publish the audited accounts on the Trust’s website by 31st January 2019 and prepare and submit your Statutory Accounts and Financial Statements to Companies House no later than 31st May 2019. The accounting principles for the Year End are much the same as for a maintained school however, whilst the accounting system will produce the financial information required, there will be a considerable amount of additional information that your accountant will need. Your accountant will advise on exactly what they require, but the following are some of the things you may be asked to provide:

Financial Information: Summary Trial Balance for the full Financial Year to 31st August 2018 including

accruals Details of all accruals:

Creditors (accrued expenditure) – supporting evidencePrepayments (prepaid expenditure) – copies of invoices to support theseDebtors (accrued income) – supporting evidence Receipts in advance (deferred income) – supporting evidence

Aged Creditor listing – commentary on old unpaid creditors Aged Debtor listing – commentary on debts more than 3 months old Bank Reconciliation as at 31st August Petty Cash reconciliation as at 31st August Unreconciled transactions listing Copy of Bank Statement Detailed Listing of all transactions for the year.

Additional Financial Information: Fixed Asset Register

https://www.gov.uk/guidance/academies-accounts-direction


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Details of additions and disposals in the last financial year Copy of property valuation (1st year only) Details of investments Details of stock held (uniform, stationery etc.) VAT Reconciliation Analysis of carry forward funds by category (restricted, unrestricted etc.) Copy of 2017/18 and 2018/19 budget

Salary Information: PAYE/NIC liability schedule – agreeing to amount in Payroll Control Account Pension liability schedule – agreeing to amount in Payroll Control Account Breakdown of employer and employee pension contributions for the period ended

31st August 2018 Summary of payroll reports for the period ended 31st August 2018 Schedule listing any individuals whose FTE salary is in excess of £60k per annum Copy of pension valuation report as at 31st August 2018 Copy of the Nominal Roll

Other Information: List of Governors Minutes of Governors meetings Declaration of interests Details of Governors’ insurance costs Details of Governors’ remuneration or expenses paid Responsible Officer reports Details of operating leases Census Returns

The rest of this bulletin takes you through the processes for preparing for the Year End on SIMS FMS.


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Preparing for Year End

House Keeping

To ensure the accuracy of your final accounts, we would recommend you carry out the following housekeeping activities:

Accounts Payable:

Focus | Accounts Payable

Run a report for all outstanding Purchase Orders to check validity

Reports Accounts Payable Purchase Order Reports Purchase Orders Select Outstanding Purchase Orders

Consider each order and cancel if necessary

Print a Detailed Aged Creditor Report

Reports Accounts Payable Supplier Analysis Aged Creditor Report

Check that only valid invoices/ credit notes remain as unpaid and cancel if necessary.

Accounts Receivable:

Focus| Accounts Receivable (Invoiced Income)

Print the Aged Debtor Report

In Accounts Receivable:

Reports Aged Debtor Report

Check that only valid invoices remain as outstanding. Issue credit notes if necessary. Investigate small balances against debtors. Write off if appropriate or issue refunds. Match unmatched receipts to invoices.


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General Ledger:

Focus | General Ledger

Write back all cheques over 6 months old if required

Reports General Ledger Bank Un-Reconciled Transactions Listing

To write back old cheques

Focus Accounts Payable Cheque Processing

Click on Find Cheque Number

A list of cheque runs will appear on screen

To look for a particular cheque type the cheque number in the “Looking for” box.

Click OK

A list is brought to screen that includes the cheque run that the required cheque was included on.


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Click on the required cheque run line, it will turn blue. Double click on the selected line

The cheque is displayed along with the invoices it paid.

With the cheque highlighted blue click the green cross

You will be asked to confirm whether you want to cancel the cheque.

Enter a reason for cheque cancellation and click Save

The invoice(s) attached to this payment return to Fully Authorised status.


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Check the Payroll Control Account

Focus General Ledger Chart of Accounts Review Click on the browse next to all ledger codes Type P Double click into the Payroll Control ledger code Click on view transactions Period from 0 Period to 13 Click Select Click Preview

The report will come to the screen. It can be printed by clicking on the print icon, or saved as an Excel Spreadsheet, a Word Document or in PDF, CSV, TVS and XML file formats.

Ensure that the Payroll Control balance = amounts not yet processed through the bank as at the 31st August 2018. This may be your NI/Pension payments etc.

The Payroll Control Account is used as a holding account when the payroll for a school crosses over a month. An example of this is where the PAYE and NIC’s (National Insurance Contributions) at the school for one month are paid in the following month. Therefore, this Account will create a monthly creditor for the school’s PAYE and NIC’s liability etc. This enables the whole monthly payroll charge to be charged to the Expenditure accounts in the correct month.

Check the VAT Control Account

Focus General Ledger Chart of Accounts Review Click on the browse next to all ledger codes Type V Double click into the VAT Control ledger code Click on view transactions Period from 0 Period to 13 Click Select Click Preview

The report will come to the screen. It can be printed by clicking on the print icon, or saved as an Excel Spreadsheet, a Word Document or in PDF, CSV, TVS and XML file formats.

Reconcile the payments received from HMRC (Credits) to the VAT Transfer Journals (Debits)


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Ensure that the VATCN balance = outstanding VAT submittals. It is essential that you investigate and correct any discrepancy.

If you are not VAT Registered run the VAT Exclusion Report.

Reports General Ledger VAT VAT Exclusion Report Select ‘Up to and including VAT Period’ choose Period 12

Any transactions shown will not have been included in your VAT 126 Claims. Therefore investigate the entries to ensure that they have been accounted for in your previous claims to HMRC. Any remaining items should be added to the claim for Period 12.

Complete a full System Reconciliation – We have previously issued the System Balance Control Form for Academies for this purpose. This is available to academies who have a Financial Services Helpline support contract with HfL. If this is required please contact the Helpline.


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Preparing for Year End – System Check

To ensure that there are no problems within the system that would prevent you from running a year end, we would recommend you run a Year End System Check. This report can be run at any time.

To do this:

Reports Year End System Checks This will produce a report that will list any items that will prevent you from running the Year End. You will need to correct any errors identified on the System Check report.

Errors that may appear on the year end system check report are:

Accounts Payable Unauthorised Purchase Orders Unauthorised Invoices Unauthorised Credit Notes

Accounts Receivable Unposted Paying in Slips

Non Invoiced Income Unposted Paying in Slips

General Ledger Unposted Journals

Consider whether the listed items on your report need correcting or deleting and deal with appropriately. If you require any assistance, please call the Helpline.

See below for further information on what to do when your report shows status as structures need updating.

Structures Need Updating:

This message will appear on the Year End System Check for two reasons.

1. The next financial year has not been created

To create the next financial year

Tools Define Financial Years Define Edit Years Add a year


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Check the information is correct e.g. Number of Periods, Start date, Next year Begins.

If using the Asset Module in FMS, check that the Fixed Assets Cost Centre is correct and that the Depreciation Frequency is set correctly for your academy’s requirements.

Once confirmed click

As you can see the year’s Status is ‘Not Started’


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To open the year

Highlight the year Select Open Year Save

The structures will automatically be copied to the new financial year.

2. The next financial year is already open, but Cost Centres and Ledger Codes, Groups/Templates etc. have been created in the current year after opening the new financial year.

Tools Define Financial Years Update Next Year’s structures

Year End structure update will appear to screen. It has a tabbed system and each tab will need to be selected to make sure all areas have been updated.

Go to Tab 3 first and click on Copy Templates and Links

Proceed to work through the other tabs as follows:

In this example we have set up a new cost centre shown on Tab 2.

Click on Tab 2 Cost Centre

As you can see there are 2 new Cost Centres


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Click on the tag all button

This will place a red flag next to the items you wish to copy across to the new financial year

Click on Copy Tagged

Once the items have been copied across to the new financial year the screen will be clear

Click on close

On Tab 4 just click on Copy Books and Products

On Tab 5 just click on Copy Asset Types

Click on Close


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Before Posting Accruals

Before considering accruals, you need to ensure that you have:

Posted all August transactions

Reconciled the bank to 31st August 2018 and printed bank reconciliation report and unreconciled items report

Ensure all VAT Submittals/VAT126 (if applicable) have been run

Print Balances and Reserves report

Carried out housekeeping activities

Opened the new financial year

Accruals should not be posted until all August (Period 12) transactions have been completed.

NB: Accruals are posted as reversing journals and do not affect the bank. Whilst we may have previously posted accruals in Period 12 so that all the Year End transactions are completed within the same period, we would now recommend that accruals are posted in Period 13 i.e. after a preliminary close has been run.

The preliminary close will close Period 12 and open a Period 13. Note, after it has been run you cannot transact in Period 13 except to enter normal journals and reversing journals. Accounts receivable and accounts payable can no longer be used in the 16/17 financial year.

We strongly recommend that you run a preliminary close BEFORE posting accruals in Period 13 so that the accounts can be kept up to date and invoices paid in the new financial year without affecting the closing year. This may be particularly useful if it is likely to take some time to finalise all accruals. As it is possible to run any number of preliminary closes, you will of course run another preliminary close after posting accruals as detailed further down.

Please call the Helpline for further guidance.


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Preliminary Close

Prior to performing the Preliminary Close a backup should be taken:

Tools FMS Transactions Backup

Click Yes

The message box displays the location of the backup. Make a note of the location and keep it with the Year End reports.

Click OK

Performing a Preliminary Close

Ensure there are no other users logged on and using SIMS FMS

Tools Define Financial Years Define/Edit Years

Highlight/Select 2017

Click on Preliminary Close

If the following message is displayed

Click Yes

Users of the Asset Management function of the Equipment Register will have the following message displayed.

Click Yes


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The system automatically checks that it is able to proceed and displays the following screen

If for any reason there is a failure, a red cross will be displayed against the relevant check(s).

Click on the Report icon for a printed copy of the failure explanations.

Once your screen shows that all ‘Actions’ have passed click on Continue

Select ‘Do Not Transfer Central Transactions’

Click Continue

The system runs through the Preliminary Close routine checking each of the following procedures individually.

Again, if there is a failure click on report for the printed explanation. Once each action is successful you can opt to print a report to show all transferred transactions.

Click on Perform Close Click on Yes

This operation will close up to and including the last period and no further financial transactions can take place except for Year End Adjustment and Year End Reversing journals. Depending on the speed of your computer, this can take a while to complete.

The old financial year is now in period 13.


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The Define/Edit Years screen is now displayed and the status of the year has changed from Started to Closed-Not Finalised

Preparing Accruals

You will need to consider carefully what transactions need to be accounted for as accruals. A spreadsheet is available on the grid to help you prepare this information.

You will need to consider the following types of accruals:

Creditors - all goods and services received up to 31st August that have not gone through the purchase order system i.e. sundry creditors

Prepayments – payment for goods or services relating to the next financial year

Debtors - all income owed up to 31st August that has not been accounted for on FMS (if Accounts Receivable is being used to raise sales invoices this income is already included in the accounts and should not be added as a debtor)

Receipts in Advance (Deferred income) – any income received up to 31st August which relates to activities to take place in the next financial year.

Please contact the helpline or your accountants for further advice on what should be accounted for as accruals.

You are advised to create 4 separate journals, one for each accrual type:

Creditors Prepayments Debtors Receipts in Advance

Accruals are posted as follows:

Accrual Type Debit CreditCreditors Appropriate EXPENDITURE

Ledger Codes & Cost Centres

Sundry Creditors(SC)

Debtors Sundry Debtors(SD)

Appropriate INCOME Ledger Codes & Cost Centres

Receipts In Advance

Appropriate INCOME Ledger Codes & Linked Cost Centres

RIA

Prepayments PP Appropriate EXPENDITURE Ledger Codes & Cost Centres

For clarity please remember to enter a full description for each line entry on the journal.


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Save each journal but do not post until you are sure ALL accruals have been included.

Do NOT set up a debtor or creditor for VAT. FMS automatically accounts for this.

Once all accruals have been entered

Save Post

Print

Posting Accruals

Accruals are posted using the Normal Journal - Reversing Journal facility, and must be posted excluding any VAT.

Please choose the option which is appropriate to you:-

If you have chosen not to run a Preliminary Year End prior to entering accruals:

Focus General Ledger Manual Journal Processing Normal Journal Place a tick in the Reversing Journal Option.

Select period 12

Enter a narrative that relates to the journal Place the radio button in the reversal year of Next Year - 2018 Select period 1 as the reversal period


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If you have run a Preliminary Year End:

Focus General Ledger Manual Journal Processing + to add a journal Year End Adjustment Journal Year End Adjustment Journal Reversing

Enter a narrative that relates to the journal Select period 1 as the reversal period

Once all accruals have been entered

Save Post

Print

Reports to Print and Keep

Any school specific monitoring/cost centre reports

Debtor & Prepayment Journals

Creditor & Receipts in Advance Journals

Balances & Reserves (Reports | General Ledger | Balances and Reserves)


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Unreconciled Transactions Listing (Reports | General Ledger |Bank| Unreconciled Transaction Listing)

Bank Reconciliation –Reconciled to the 31st August (Focus | General Ledger | Bank Reconciliation)

Photocopy of All Bank Statements(s) as at 31st August

Aged Creditor Report (Reports | Accounts Payable | Supplier Analysis | Aged Creditor Reports)

Aged Debtor Report (Focus | Accounts Receivable| Reports | Aged Debtor Report)

Summary Trial Balance by Ledger Code (Focus| General Ledger | Trial Balance | Summary Trial Balance | By Ledger Code)

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Copies of Reports printed

Check List

o Year End System Check Run

o Correct Year End System Check Errors

o Validity of Outstanding Purchase Orders

o Validity of Aged Debtors

o Validity of Un-Reconciled Listings

o All Transactions entered to the 31st August 2018

o Reconcile the Bank Accounts to the 31st August 2018

o Payroll Control Account checked


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o VAT Control Account Balance = Outstanding amount to be reimbursed by HMRC

o Reversing Accruals Posted

o All Reports Printed

Note: Once satisfied the next step is to run another preliminary close if you ran the closedown prior to posting accruals. If you chose not to run a preliminary close earlier you must now run the preliminary close which closes Period 12 and opens a Period 13. It is possible to run any number of preliminary closes. After the first and any subsequent closes you should not transact in Period 13 except to enter normal journals and reversing journals.

If you require advice or support for the Year End process please contact the Helpline on 01992 555753 or e-mail [email protected]

mailto:[email protected]

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