Back in 2022, my accountant (sourced through Quickfile) told me I could make a pension payment through my company in a current year and journal it into the previous tax year. For over a year now I have been asking him to do this for me in Quickfile or tell me how to do it myself. At this point I really think he has no intention of helping me at all.
I understand the basic journal process in Quickfile but don’t know how to shift an item from one tax year to another, or which codes to use.
You can journal to a previous year providing it is not locked Account Settings > All settings > Account lock date.
If it is locked you would have to set it back a year which would involve removing the year end journal.
If your journal is to a profit and loss code this would also impact your year end journal and current years balance sheet (as profit and loss codes are cleared down to the balance sheet by the year end journal)
Its not something the support team can help with I’m afraid, I would recommend speaking to a accountant for professional tailored advice.
The general idea is called “accruals” or “prepayments” depending which way you want to move things. If you want to record an expense in one year’s P&L but you actually incurred the expense later then that’s an accrual - if you’ve initially tagged the payment as an employer pension contribution during this year, but you really want it to show on the previous year’s P&L, then you’d make a journal that debits the P&L code and credits accruals on the last day of the previous year, and set the journal to reverse on the first day of the current tax year. This means that the previous year will show the debit on its P&L and the liability under accruals on the year end balance sheet, and the current year’s P&L will show nothing (the debit you’d already tagged during this year being cancelled out by the credit from the reverse journal).
My main example of this is when I get the accountant to prepare the tax returns then I have to add an accrual to put their fees (which they invoice me for this year) into the P&L for the year they relate to.
The reverse case of prepayments is similar, say you’ve paid 6 months rent two months before the end of your financial year and you want to recognise 4 months of that in the next year, then you’d journal 4 months as credit rent and debit prepayments at the end of the current year, and reverse it at the start of the next year. That would put 2 months rent in this year’s P&L and four months as an asset on the year end balance sheet, that asset turning back into an expense for next year.
Thank you. I cannot do the Year End process for the last two years because my accountant, after over a year of asking still hasn’t helped or advised on this matter. I would much rather get professional advice from my accountant but it’s like shouting into a void.
I would much rather get professional advice from my accountant but it’s like shouting into a void.
Perhaps it’s time, regrettably, to consider a new accountant? These are very simple accounting matters and it should be simple for an accountant to advise on appropriate ways of resolving the situation, similar to some of the suggestions given so far in this thread.
Thank you Ian - that is very helpful.
However, I have realised that the accounting period is actually locked. So my accountant must have done the EOY process without first adding this journal.