Year-End Close: Posting Retained Earnings For The Year End

The end of the year is right around the corner and the Rent Manager® support team wants you to have access to the information, tips, and tricks that will make your year-end close straightforward and problem-free.

The use of retained earnings in Rent Manager is basically a report option that enables you to separate the current year’s profit or loss from the previous year’s. To separate these amounts on your reports, a system preference option can be enabled… and here’s how you do it:

Enabling the Retained Earnings setting:

  1. Go to File > Administration > System Preferences.
  2. Scroll to General Ledger and select Settings.
  3. Enable (check the box)Roll ‘Net Income’ from prior fiscal years to ‘Retained Earnings’ on the balance sheet.
  4. Click Save.

Your Balance Sheet will now display net income and retained earnings in the Equity section:

* The net income value includes the current year’s income, minus the current year’s expenses.

* The net income value can be clicked to open a Profit & Loss statement. This P&L will be dated from the first day of the current year to the date of the balance sheet and will display all income and expense values within that date range.

* The retained earnings value includes all previous year’s income, minus all previous year expenses.

* The retained earnings value can be clicked to open a Profit & Loss statement. This P&L will be dated from the day of your general ledger start date to the last day of the previous year and will display all income and expense values within that date range.

Please note: Nothing is actually posted and funds do not actually move between accounts whenthe “Retained Earnings” setting is enabled. This system preference setting only populates financial reports differently.

Disabling the Retained Earnings setting:

  1. Go to File > Administration > System Preferences.
  2. Scroll to General Ledger and select Settings.
  3. Disable (uncheck the box) Roll ‘Net Income’ from prior fiscal years to ‘Retained Earnings’ on the balance sheet.
  4. Click Save.

Once disabled, your Balance Sheet will now display net income and retained earnings (if used in a transaction) in the Equity section:

* The net income value includes all year’s income minus all year’s expenses.

* The net income value can be clicked to open a Profit & Loss statement. This P&L will be dated from the general ledger start date to the date of the balance sheet and will display all income and expense values within that date range.

* The retained earnings value will only appear if the account was included in a transactions by a user, such as a journal entry.

* The retained earnings value can be clicked to open the General Ledger. This report will list all transactions from the general ledger start date to the date of the balance sheet where the retained earnings account was used.

REQUIREMENTS / PERMISSIONS

Go toFile > Administration > Manage Users:

* Properties group: Enable (check) the appropriate Properties

* System group: View and Edit Administration items

* Letters / Reports group: Run reports Enabled

* Letters / Reports group: Run accounting reports Enabled

* Accounting group: Override General Ledger Report Drill Down Enabled OR
Reports Tab: General Ledger group: General Ledger Enabled

* Reports Tab: Financial Statements group: Balance Sheet Enabled

* Reports Tab: Financial Statements group: Profit & Loss Enabled

For complete instructions on how to process year-end tax documents and reports in Rent Manager, refer to the Knowledgebase and our Year-End Close Resource Center.

Photo credit: Dave Dugdale/Foter/Creative Commons Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0)