Re: Change of accounting year

>  From:    nick@galaxy.ltd.uk (Nick)
>From Al Macintyre V405 CD

>  My company has been 'merged' with another and we must change our 
accounting 
> year (V4.05CD). 
>  
>  Currently our year runs from July to June and we are in accounting year 
2000.
>  The new set up runs from January to December and from January 1 2000 we 
must 
> be in accounting year 2000.
>  
>  Does anyone know what must be done to accomplish this? 
>  
>  Nick Balchin

Short answer - I think you are being asked an impossible task.  Whoever is 
making this command from on-high needs to be brought into a meeting in which
1. That individual gets a fast class on the (in) capabilities of BPCS.
2. The problems are laid out & the alternatives considered.
3. You have a couple of reccommendations ready, with pros & cons for upper 
management to consider.

Medium answer - think about deliberately mucked up fiscal months for a 
transitional period as opposed to a Y2K-like conversion so that every place 
that contains fiscal year gets subtracted by one, to make you currently in 
fiscal year 1999, in which for some months in the rest of this year, there 
will be no end-of-month processing.

Another approach - Think conversion to separate environment, with roll-back 
of relevant fiscal period.  Environment-now will run to December 1999 & end 
in the middle of the old rules.  Environment-new will start in January 2000 
with the new rules and ZERO accounting history, because the history will be 
governed by the old rules, which are not valid in the new rules.  Although 
not all accounting records contain fiscal month, any that do cannot be 
included & you may not want to have a partial story sitting there ... better 
to force people who want to know data prior to January 2000 to go get the 
whole story from Environment-old.

There is also paperwork that has to be filed with the government regarding 
the change in your fiscal year, and their regulations may further constrain 
what options are open to the conglomerate - it might not be legal to have a 
transition arrangement.

These rules might vary according to different nations that you do business in 
... Nick's e-mail looks to me like it is from Britain, while I am in the USA 
... different nations different government beaurocracies.  You probably have 
Euro stuff to contend with - we have NAFTA ... some of our customers in North 
America are mandated by government regulations for us to tell them how much 
content of what we manufacture originated with which of the 3 nations in 
NAFTA, but the new beaurocracies cannot hold a candle to the old established 
government regulation "factories."

Right now you are working in accounting year 2000 which runs from July 1999 
to June 2000 ... it is probably too late to go back to accounting year 1999 & 
extend it from July 1998 to December 1999.  Via GLD105, I think is the BPCS 
job for designer accounting calendar, you can alter start & end dates of what 
constitutes each month.  

At Central, our fiscal month of September ended last week, because we try to 
have fiscal months of the same number of weeks, with an extra week in months 
that have a lot of vacation days, or are slow months for our customers, so 
that the $$$ volume is evened out by month. 

There needs to be a decision reached by Accounting Management, if the 
transitional approach is going to be used.
1. Fiscal Year 1999 ran July 1998 to June 1999 & prior to that under the old 
rules.
2. Fiscal Year 2000 will have to be July 1999 to December 2000 & this will be 
a transitional combination fiscal year.
3. Fiscal Year 2001 will run Jan 2001 to December 2001 & from then on normal 
years under the new rules.

Fiscal Year 2000 you have probably closed out July & Aug, while Sep EOM is so 
close it is probably 2 late to delay ... this means that you have 9 fiscal 
months left within which to fit 15 calendar months.  

Instead of working on a strict ratio of 5 real months jammed into 3 fiscal 
months, you might want to structure this, so that there is in fact a 
month-end occurring close to the end of each calendar year quarter ... Sep 
Dec Mar Jun Sep Dec ... for some kinds of businesses, the quarter has some 
significance.

A key question is whether there is any upper limit on the time duration that 
GLD105 allows to be within a BPCS fiscal month.

Since each fiscal month, in the time that is left, will be of a duration of 
almost twice as long as a usual month, there may be a need for some mid-month 
reports showing month-to-date status, without actually running end-of-month 
closure programs.

I vaguely recall that BPCS has 13 fiscal months ... we use the 13th month for 
adjustments after Year-End that we found out too late to include int the 12th 
official month.

Reccommendation - Obtain the services of consultants that are both experts in 
BPCS and accounting rules such as government regulations.   Crowe Chizek is a 
possibility - they are one of the big 8 accounting consulting firms in North 
America & they are also in the BPCS conversion & modification business.  They 
have people who know their stuff, but they are also expensive.  I know other 
US consultants that are just as good with BPCS and cost less, but they don't 
have comparable accounting credentials.
http://www.crowechizek.com/

Doubtless there are UK equivalents.

Quick Alternative - check with your company's auditors.  There ought to be 
some kind of government pamphlet regarding the rules for changing a company's 
fiscal period ... this will help you see which schemes are legal & which are 
not, thereby narrowing the selection of choices.  Take the auditors into your 
confidence ... they may be able to suggest additional pros & cons between the 
alternatives considered so far. 

You may have more than one set of relevant auditors - those that last audited 
you & those associated with the new conglomerate.  Perhaps someone from your 
auditors should sit in on the discussion with upper management that I 
suggested in my short answer.

Al Macintyre
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