Year-to-date figures for a non-January financial year
The management accounts year-to-date preset starts on 1 January. How a non-profit with a March or July year start gets true year-to-date figures.
By Achekam · · 5 min read · For Non-profit businesses in South Africa, Nigeria, Kenya
The board meets in October and asks the usual question: how are we doing for the year so far? The treasurer opens the management accounts, chooses year to date, and presents the figures. Nobody notices that the organisation's year started on 1 March, and the report starts on 1 January. Two months of last year are in the figures, and the board has just discussed numbers that belong to no year at all.
Plenty of non-profits do not work to a calendar year. In South Africa many align with the tax year, which runs from 1 March to the last day of February. In Kenya the government's financial year runs from 1 July to 30 June, and many organisations that work with government follow it, while companies may use their own twelve-month year. Funders, too, often impose their own grant years.
This article explains why the year-to-date shortcut misleads in those cases, and how to build accurate year-to-date reporting in Achekam on your own financial year.
What the preset does
Achekam's management accounts show an income statement for a chosen period beside the period before, and a balance sheet at period end, both added up from your own journals and exportable as PDF or CSV. They are the right basis for a board pack.
The catch is one preset. The year-to-date preset starts on 1 January, not on your organisation's own year start. For a calendar-year organisation that is exactly right. For a March, April or July year it produces a figure that mixes two financial years: the tail of last year and the start of this one.
The resulting numbers look perfectly reasonable, which is why the problem survives. Income, expenses and a surplus or deficit all appear; nothing on the page says the period is wrong.
Choosing your own period
The fix is simple: do not use the preset. Choose the period yourself, from the first day of your financial year to the last day of the month you are reporting on.
For an organisation whose year starts on 1 March, the October board pack covers 1 March to 30 September. For a July year, it covers 1 July to 30 September.
Then look carefully at the comparison column. The income statement shows your chosen period beside the period before. Check which dates that comparison covers before you label it in the board pack. If the board expects the same months of last year, and the comparison shows something else, say so on the page, or produce last year's same months as a separate report and set the two side by side.
The balance sheet is not affected by the preset in the same way: it shows balances at the end of the period you choose. Make sure that date is the last day of the reporting month.
The trial balance as a cross-check
The trial balance shows each account for all time, for a period or at a date, and says whether debits equal credits. It is a useful way to confirm the management accounts are reading the right months.
- Run the trial balance for the same period you chose for the income statement, from your year start to the reporting month end.
- Compare a few income and expense totals with the income statement. They should agree.
- Run it at the reporting date as well, and compare the bank and grant liability balances with the balance sheet.
If the figures disagree, the most likely cause is a different start date in one of the reports. Fix it before the pack goes out.
Close the months before you report
Year-to-date figures are only as good as the months they include. Months can be soft-closed, hard-closed and locked, and a closed month refuses postings from every source. Close each month before it goes into a board pack, so the figures the board sees cannot change underneath them. If a late adjustment is needed, it goes into the current month with an explanation rather than quietly altering a month already reported.
What to check before closing a month sets out the checks to run first.
Setting the budget per period
A year-to-date figure means little without a plan to compare it with. You can set a budget per account and period and compare it with actual figures from the ledger.
Load your annual budget by month, starting from your own year's first month, not from January. Spread each line across the months when you expect the spending or income to happen. A grant that arrives in two tranches should be budgeted in the two months it is expected, not evenly across the year. Then the year-to-date budget for March to September is the sum of those months, and the comparison with actual is meaningful.
For grants that run on their own funder year, keep their budgets against their own accounts and periods as well. Tracking grant spending against the budget explains that comparison, and keeping restricted funds apart in your chart of accounts the account layout behind it.
AccountingTools' overview of management accounting describes it as the internal reporting that tracks revenues, expenses and variances to help managers act, which is exactly what a board pack built on the right year should do.
A board-pack checklist on your own year
Before each board meeting:
- Period. Income statement from your year start to the reporting month end, chosen by hand, never the preset.
- Comparison. Label exactly which dates the comparison column covers.
- Balance sheet. At the last day of the reporting month.
- Cross-check. Trial balance for the same period agrees with the income statement.
- Budget. Year-to-date budget built from your own months, with variances explained.
- Closed months. Every month in the period closed before the pack is issued.
- Note. One line on the cover stating the financial year and the period covered.
Write your financial year's start date at the top of your board-pack template today, so nobody reaches for the preset again.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
