Office Accounting: Year-End Task Overview

By David H. Ringstrom, CPA

It’s that time again …out with the old accounting year and in with the new. This may be the first time that you’ve dealt with year-end processes in Microsoft Office Accounting, formerly known as Microsoft Office Small Business Accounting, so I’m here to give you the lay of the land. All of the guidance I offer is applicable to both versions.

Closing a Fiscal Year

Closing a fiscal year is a similar process:

1. Choose Company, and then Manage Fiscal Year.
2. Select the fiscal year to close, and then click Close Fiscal Year.
3. Click Yes to confirm that you wish to close the fiscal year.
4. Click Close to dismiss the Close Fiscal Year window.

Unique feature: Unlike Peachtree Accounting where closing a fiscal year is irreversible, you can reopen a closed fiscal year. Simply select the fiscal year from the Manage Fiscal Year window, and then click Open Fiscal Year.

 

Protecting Prior Periods

No accountant wants to try to defend a prior year tax return when the client’s books don’t match the documents filed with the IRS. Closing a fiscal year alone does not prevent users from modifying or posting transactions in the closed year. Instead, protect prior year transactions by setting a prevent posting before date. To do so, follow these steps:

1. Choose Company, and then Preferences.
2. On the Company tab specify a date in the Prevent Posting Before field.
3. Click OK to close the Company Preferences window.

Restricting access: It’s important to carefully manage users’ privileges in any accounting package. Savvy or unscrupulous users won’t be afraid to dig around and discover how to unlock prior period transactions. Typically only one or two employees should have Administrator rights in Office Accounting so that the ability to access closed accounting periods is highly restricted.

Opening a New Fiscal Year

Unlike QuickBooks with its single accounting period spanning infinity, Office Accounting enables you to divide your client’s activity into discrete fiscal years. As a result you must create a new fiscal year on an annual basis. Doing so just takes a moment:

1. Choose Company, and then Manage Fiscal Year.
2. Click New Fiscal Year, confirm the close of fiscal year date, and then click OK.
3. Click Close to dismiss the Close Fiscal Year window.

 

Creating Budgets

Another winter rite for some businesses involves creating a budget for the new year. Although Office Accounting doesn’t allow budget tracking inside the software, creating a budget spreadsheet couldn’t be simpler: choose Company, and then Create Budget Spreadsheet. A comprehensive budget spreadsheet will appear in Excel, as shown in Figure 3.

Figure 3: You can create a budget template with only two mouse clicks.

 

 

Printing Tax Forms

Your phone probably started ringing on January 2 with clients ready to print W-2 forms. Much of the payroll functionality in Office Accounting, including W-2s, requires a subscription to the ADP Payroll Service. Information on this capability is readily available by choosing Employees and then Payroll. W-2 forms cannot be printed from Office Accounting without an ADP subscription.

Office Accounting does enable comprehensive tracking of 1099 vendors and transactions — but you’ll need to pay a nominal fee to print the 1099 forms themselves. You can download and install a free FIRE (Federal Information Return) add-in from TaxSoftware.com. You only incur a fee when you print or file 1099 forms. There are several benefits to using TaxSoftware.com:

• It’s inexpensive — pricing starts at $12.50 for up to 25 1099 forms, with an additional 25 cents for each additional document.
• Electronic filing with the IRS is included with the service.
• You’ll save time. Office Accounting does not provide any reports that include tax ID numbers for 1099 vendors. You’ll have to retrieve tax ID numbers one at a time from the individual vendor records if you choose to use another means to generate 1099 forms. Conversely the add-in prints the entire form, including tax IDs, for you.
• Support is available by telephone or e-mail.

 

Detailed instructions for installing the Office Accounting/Small Business Accounting add-in for 1099 forms are available here: http://www.taxsoftware.com/office_sba.html. A new TaxSoftware.com menu, as shown in Figure 1, will appear once you install the FIRE add-in.

Figure 1: An add-in enables you to print 1099s from within Office Accounting.

 

Quirky: The FIRE add-in requires several helper applications. Keep running the TaxsoftwareSBA_1_0_4.msi file that you download until the TaxSoftware.com Wizard starts. You may have to run the .msi file three or four times to get to this point. Keep following the onscreen prompts and run the .msi file until you see the TaxSoftware.com Installation Wizard appear on the screen, as shown in Figure 2.

 

Figure 2: You may have to run the .msi file multiple times before you see this screen appear.

 

Try before you buy: The FIRE add-in enables you to demo the 1099 printing functionality gratis. To do so, choose Company, and then Company Information. Set the Federal Tax ID field to 52-0000001. Don’t forget to change the tax ID back once you’re done trying the 1099 printing!

 

 

Introduction to 1099 Tracking

Although printing 1099s might be more of a challenge than you expected, tracking 1099 vendors is easy in Office Accounting. Set the 1099 status for a vendor by following these steps:

1. Choose Vendors, Vendor Lists, and then Vendors.

 

Speed tip: Ctrl-Shift-V gets you to this screen with a single keystroke.

 

2. Double-click on the vendor you wish to maintain.

3. Click on the Details tab, and then complete the Federal tax ID field.

4. Select the Vendor 1099 field, and then click Save and Close.

 

Office Accounting also provides significant control over 1099 categories. You can easily manage thresholds and associate specific general ledger accounts with specific boxes on the 1099 form. To set a threshold for a 1099 category, follow these steps:

1. Choose Company, and then Preferences.

2. Select the Vendors tab, and then click the 1099 Categories button.

3. Select a 1099 category, such as Box 1. Rents, and then click Edit.

4. Complete the threshold screen and then click OK.

 

The 1099 Category window that you just used also lists any accounts that you have marked as specific to a 1099 box. To mark an account as such, follow these steps:

1. Choose Company, Company Lists, and then Chart of Accounts.

 

Speed tip: Ctrl-Shift-A gets you to this screen with a single keystroke.

 

2. Right-click on the account you wish to maintain, and then choose Open Selected Items.

3. Choose the appropriate 1099 box from the 1099 category list, and then click Save and Close.

 

 

The views and opinions expressed in this column are those of the author and do not necessarily reflect the opinions of Microsoft.