December is the last month of the year. It’s a time to celebrate with your loved one. It’s a time to regroup after being disrupted by the COVID pandemic for two years. It’s time to have a resolution for the new year. It’s time to close your book if your company’s fiscal year-end is in sync with the calendar year-end. It’s time for a stocktake if you are closing the book.
What is a stocktake?
To compare the physical stock count against the stock on hand shown in the book. Adjust the book if there are differences due to missing or damages.
What and how to prepare a stocktake?
First, determine a cut off date. Assuming you have decided to do a stocktake on 28 December, you should enter and post all inventory related transactions before your stocktake. Then, do a backup before you proceed with stocktaking.
From the MoneyWorks accounting system item list, click on the start stocktake button to proceed with the stocktaking process. MoneyWorks will then create a snapshot based on the current stock on hand. Any transactions entered after the stocktake started will not account for the stock discrepancy.
Assuming your current stock on hand is 100 units. MoneyWorks copy the current quantity (100 units) into the snapshot quantity when starting the stocktake. MoneyWorks will use the snapshot quantity to compare against the actual count entered to derive the differences (you should not enter any inventory related transaction dated before the stocktake).
Print a stocktake worksheet report for your store person to do the physical count. Enter the actual quantity counted into the stocktake list once the stocktake worksheet has returned. Select all the items and click on the finish stocktake button, then enter the stocktake adjustment journal date and account to complete the stocktake.
You may then proceed with stock revaluation or written off for obsolete products after your stocktake.
Stock valuation report.
Print a stock valuation report once you have completed the stocktake. The valuation report will base on the current stock on hand quantity and value. Ensure the asset value in the valuation report is the same as the ledger, and proceed with other closing tasks once verified.
Stocktake is part of the financial year-end closing. Start the stocktake process before your long holiday break.
A stocktake is a physical count of your inventoried items and is necessary on a periodic basis, no matter how careful you are, the actual stock on hand may differ from the record in MoneyWorks accounting software.
The steps taken are:
Enter and post all stock related transactions in MoneyWorks.
Backup company file.
Click the start stocktake process button.
Print the stocktake list report from the reports menu for the physical stock count.
Enter the stock count into the count column.
Highlight all the items and click the finish stocktake button to finalise the stocktake.
Print the stock valuation report.
Lock up the financial period.
MoneyWorks create a snapshot of the current stock on hand once you clicked the start stocktake process button. Any stock related transaction posted after the start stocktake process will not affect the snapshot quantity, and the calculation of the quantity differences are between the quantity count and snapshot. It’s important to hit the start stocktake button on or before the financial year-end to allow the accounting software to capture an accurate quantity on hand, although you may not enter the count quantity immediately.
MoneyWorks will prompt to record a stock journal once you have finished the stocktaking, it will debit/credit from the inventory asset to the stock adjustment account stated in the journal. Then, print a stock valuation report and lock the financial period after completing the stocktake.
Stocktaking is an important process, consult your MoneyWorks consultant if you have doubt. Reference: page 348 of the MoneyWorks version 8 User Guide, Stocktaking
Financial Year (aka Fiscal Year) consist of financial periods used to calculate annual income statement for businesses. If you are following the Calendar month, then your financial year-end closing is December.
During financial year-end closing, besides preparing the accounting schedules and post all transactions, you have to do a stocktake, bank reconciliation and set a closing exchange rate.
Do a backup before you start a stocktake process from the command menu of the MoneyWorks accounting software. You have to do the stocktake process before your new financial year. Once the stock count has entered, complete the stocktaking process by activating the Finish Stocktake from the Command menu (ensure dated as the start stocktaking date). Then, print the Stock Valuation Report (usually I will keep a PDF copy as well) and backup your company file.
You should reconcile your banks that are in foreign currency before set the exchange rate for the year-end closing. Once you entered the exchange rate, MoneyWorks will automatically generate unrealised exchange gain/loss journal to adjust the banks, accounts receivable and accounts payable which are in foreign currency.
Backup and lock the period once you have completed the financial year-end closing to prevent other users from recording transaction into the wrong period.