Accounting Software – Closing Date vs Crossover Date
When crossing over to a new accounting software, often you will crossover after you have closed up the existing book. That is, to start using the new company file or accounting software in the new financial year.
MoneyWorks Gold and Datacentre are now IRAS E-Tax Guide CompliantAssume that your financial year (fiscal year) is from January to December (that is, the closing date will be 31 December). You wanted to cross over to a new accounting software as of 1 January 2015. Should you record the opening balance dated as of 31 December 2014 (the closing date) or should you use the 1 January 2015 (the crossover date / opening balance date)?
Many users will tend to use 1 January 2015, since it is an opening balance, so it is logical to use 1 January 2015. Agree?
There is nothing wrong to start off your book in the new accounting software with the crossover date.
However, I prefer to use 31 December 2014 as the opening balance date instead of 1 January 2015. Why?
If I were to use 1 January 2015, the transactions of my opening balances and the audit adjustment which I am going to record later will fall into my current year GL (General Ledger) and this may mixed up with my current year’s transactions.
Besides, using the Closing Date (31 December 2014) as an opening balance date will allow me to print a comparison Balance Sheet between December 2014 and 2015 on my next closing.