How to change GL Accounts that were set up incorrectly
During year end processing, some companies discover that certain GL accounts were incorrectly set up using the wrong Account Type.
For instance if Income Statement accounts were set up as Balance Sheet accounts, these accounts would not close to Retained Earnings after running Create New Year. In other words, the accounts would still have a beginning balance in the new year.
If you find yourself in that situation, here’s how to resolve it.
Ensure the option Allow Posting to Previous Years is selected.
Create a new GL account with the correct Account Type (Income Statement).
Create a GL entry to transfer the balance from the old account (Balance Sheet) and into the new Income Statement account.
Select period 12 and the fiscal year in which the entry is intended to be posted.
Mark the old Balance Sheet account as Inactive so no additional entries can be posted to this incorrect account.
Repeat steps 2 through 5 for each account that was set up incorrectly as a Balance Sheet account.
NOTE: Do not run the Create New Year function again. The system will recognize the entry is posted to a prior year and will update the Retained Earnings account.
Be sure to contact us if you need help with this or any other issue with your Sage 300 software.