Our fiscal year runs from Sept 1, 2012 - Aug 31, 2013. Our current fiscal year is called 2013. The company's ownership has changed, and they wish to close 2013 as at July 31st. We would then run a short year, from Aug 1, 2013 to December 31, 2013 and then close end of December, as that is their year end for all companies belonging to the group. The new year, opening on Jan 1, 2014 would be Fiscal 2014.

How does Adagio handle this? If we are running 2013 now, and don't actually want 2014 to start until January, what would the interim period be called? How would it be handled?

Thanks for whatever input you can provide!

Barb

Barb:

Adagio has no concept of a short fiscal year. There is no good way to handle this within the existing fiscal calendar structure. A particular problem is managing the prior year comparatives (assuming you are concerned about them)

You can search the forum and you will find many different suggestions on how to handle this. The only one I recommend is to have your Adagio Consultant create a new Ledger database and transfer any required data from the old database to the new database.

Hi Barb.

Doug is right. There is no easy way to do this. The complexity is dependent on how you want the prior year comparative to work.

I guess congratulations are in order!

Any possibility of adding something in to address this in future? I would imagine from Doug's comment about "many different suggestions on the forum" that this has come up before. In our case, we want to simply do ledger entries to clear the prior (short) year to zero, and have the subledgers continue to work. There is a lot of value in keeping the subledgers working as they have been. The largest being the customer data base of course. It is very important for our employees to be able to access past customer purchases without flipping back and forth between "old" data base and "new". If we had to do that, I can guarantee mistakes would happen.

Also, I like the fact that we have years of history to compare, in ledger. Lots of value in that as well.

There is much talk of moving us over to Chameleon, which is what the branch already established in Mississauga is using, which would make me very sad. If we knew this might be something you would be looking at in the future, that would help. Since we are definitely TWO different companies, this does not necessarily have to happen.

Possible? A year might be called 2013A, to differentiate. Of course, I don't know the ins and outs of this, I'm just throwing things out there. As I said, it sounds like this has been a problem for more companies than just ours.

Barb

Barb:
One of the advantages of the Adagio design is that the GL and subledgers are related but not interlinked. When Doug talked about creating a new database, he was referring only to the GL. You would keep your subledgers "as is" with no data loss.

Hi Barb,

Bruce has already pointed out that the subledgers are independent of the general ledger, so you can just keep on using them.

And Adagio Ledger already allows two year's to co-exist in the same calendar year, using the 2013A construct for the short year.

The complexity comes in the financial reporting of comparatives. Period 1 in one year is not period 1 in the previous year (well, it is, but it refers to different months which usually makes the comparative numbers meaningless. YTD comparisons get difficult when the short year is part of the statement.

So, you generally need a complete custom set of statements to cope with the short year, while you are including it in the comparatives.

The complex formulas necessary can all be built in the financial reporter, but are unique to each company's circumstances. It has come up several times on the forum since we've been selling Adagio for 14 years. However, it is rare that a single company will be faced with this more than once or twice in its existence.

Just plan how you want this to work, and there are several people on the Forum who can help you make this happen. There's no need to change accounting systems.

Hi,

Contrary to some of the statements above, Adagio does handle this fairly effectively. We routinely do this type of reorganization within Adagio because this is a common situation as companies grow, and consolidate or reorganize. We're accountants as well, so we understand the implications.

It's worth noting that Adagio is one of the few accounting software solutions that actually allow you to create a stub period fiscal "year", whereas most require you to recreate an entire new dataset. Creating a new GL dataset will work but in our experience is the least desirable resultant, given you can create a stub fiscal year (period) within Adagio and retain your GL history.

The -A ,-B solution that Andrew describes for stub GL's will allow you to do the requested stub period reporting, and we believe was created for this specific need.

You do need to know that comparative reporting for previous fiscal periods with different year ends ie period 12 to period 12 is a still problem but would still be a problem if you recreated a new dataset. You cannot revise historically posted periods in the closed GL fiscal periods but you can trick the financial reporting to pull in comparable periods such as Dec (period 12) and compare to a previous Dec that might be period 5 in prior years.

Normally in the situation described, we recommend that the new stub period will really start with period 8 in August, and end in period 12 in December 2013, so that going forward you have comparative reporting monthly reporting for subsequent full fiscal year reporting. You will probably need to modify your current financials if they do monthly comparisons between previous and current fiscal years but that is easy enough to do.

You need to end the year for the current July 31, 2013, and create a 2013-A after you have rolled the year. We usually do with GV Read/Write, and adjust the 2013-A fiscal periods so that August will be retrieved into 2013-A as period 8. You will need to do fairly quickly to avoid remedial corrections within your retrieved or posted batches.

Talk to your Adagio consultant, and if they cannot help you with this solution, we can help you with an Adagio solution.

Best,
Brian

Hi Barb,

I've had to do this with 3 or 4 companies over the last couple years so it's definitely doable in Adagio. In all cases we stuck with the same databases (including GL) and modified the Financial Statement specs to do the required reporting. In our case the comparatives were only over 2 years and we found that we needed different custom specs to deal with each of the new years, which for you would be 2013A and 2014 (the first full year under the new scheme). From 2015 onwards (assuming your comparatives are only 2 years you should be able to use your current specs again.

In my most recent case, the client wanted to treat what you call the "short" year as a "long" year. In other words, they would have wanted to treat the YTD position reported in September 2013 as covering 13 periods not 1 and December 2013 as 16 periods not 4. Not being an accountant, it was not for me to question their motives but simply to do their bidding as their Adagio guy. While painless for the end user, I did find writing the required specs challenging to say the least.

Changing at the end (rather than the beginning) of August would have been "cleaner" from your current perspective but the good news is that whichever way you want it your Adagio guy can do it (or find out how to do it) for you. However, once you decide when the change is to occur it is important that you get the Fiscal calendar sorted out before beginning to key transactions into a period that we would want to have no transactions or they will have to be reversed out and posted to the correct period anyway. This would be an unnecessary waste of time and resources and Time and Resources = money (right).

I'm sure you'll find a good solution for this.

Pete

Barb:

My comments were definitely for Ledger only. All the sub come along intact. For Ledger I always bring along as much history as the client asks for, reorganized so that the fiscal reporting works the way it should.

One of the problems with fiscal 2013-, 2013-A, 2013-B, etc is the fact that its fiscal 2015 before your fiscal calendar is back to where you think it should be.