Federal and Provincial Governments and even the major Banks are implementing a series of changes that all come into effect in 2006.
Mandatory data retention has become law for most levels of Government. While companies have always retained paperwork for a period of seven or more years, it is now necessary to retain electronic records for an equivalent period of time. This needs to be done for a number of accounting modules, including:
2) General Ledger
3) Accounts Payable
4) Accounts Receivable
5) Inventory Control
6) Property Management
Fortunately, this is a simple matter to accomplish before running the Year-End Closings. In Payroll, the creation of a prior year’s database is automatic. In the other modules this requires the use of Libra’s Database Management Utility to create a new database from an existing one. This can also save you considerable grief should the closing fail to complete normally. In such cases we can copy last years data to reverse the failed closing and just start over. When utilizing this utility you must provide a database to copy from and one to copy to. Only three digits are permitted in this procedure so we would recommend using abbreviated numbers to represent fiscal years as illustrated in the following example.
Database to Copy From: GLD001
Database to Copy To : GLD205
In the above example 2005 data would be accessed from database 205 and database 001 would be closed to drop prior year data. This needs to be repeated for AP, AR, etc. Other forms of backup are recommended for off-site storage as well. Tapes, CD’s and DVD’s make for inexpensive off-site backups and can in many cases retain the full 7 years of data in a single easily accessible location.
Most of the major banks are advocating a new standard cheque file layout to commence the end of the year in 2006. While it is yet unclear as to how they will enforce this standard it is speculated that any cheques in 2007 that do not meet the new standard may be penalized by higher service charges. In either case, if you are ordering new cheques make sure that they meet the new standard. One of the noticeable differences in the new cheque layout is that the date must appear in the following format with the designation appearing below the date:
01 15 2006
mm dd yyyy
The Cheque Number, Cheque Date, Payee Name and Cheque Amount must also appear in specific zones to allow for new electronic clearing equipment. In conjunction with these changes, many banks are offering Positive Pay Systems whereby you can transmit the details of cheques issued to the bank. Any cheque that lacks the matching data transmitted to the bank will not be cleared. These features are meant to combat the increasing occurrences of cheque fraud and reduce the cost of automated cheque clearing equipment at the same time since one type of device will work for all of the major banks.
If you are ordering new cheques, try to get a sample to us in advance to make the necessary one-time program changes. These changes only affect the layout of the cheque itself so cheque stubs may be left as is. This may be a good time to convert your cheques to HP Compatible Laser at the same time.