Several provinces and the federal government have passed or are in the process of passing laws requiring companies to retain accounting records in their original format. This means that companies that use Computerized Accounting Programs such as Libra must retain electronic data under penalty of law. This trend was brought about to facilitate provincial and federal auditors that prefer working with electronic records as opposed to paper records, invoices and such.
In the not too distant past, companies had to close their accounting systems monthly to avoid running out of space. Nowadays, computer space is inexpensive and saving data for a year or more provides better access to information on company reports and such. Still, most companies choose year-end to delete data from prior fiscal years that is deemed to be no longer necessary. Removing data, like paid invoices & reconciled cheques, does make databases more compact and focuses companies on more immediately important current year’s accounting data.
Most companies can usually benefit from immediate access to their records of the last few years from time to time. This necessity was first addressed in the Payroll System where we need to separate calendar years of data for reporting, T4 and other government forms. A procedure was built into the Year-End Closing to create prior year databases. Database 204 was created for 2004, database 205 for 2005, etc. This covered access to prior years of Payroll data but nothing more.
There are procedures that can do the same for General Ledger, Accounts Receivable and Accounts Payable data. These are the primary modules in addition to Payroll that auditors want to look at. Inventory can also be saved in a similar manner as well as Job Costing, Property Management and other modules.
To save Libra data before you run your Year End Closing you need to do the following:
1) Make sure all users are out of Libra.
2) Go to the Database Management Utility.
3) Select: Create A New Database From An Existing One.
4) Enter the database to copy from.
(GLD001 General Ledger Database 1)
5) Enter the database to copy to.
(GLD205 for year ending 2005)
6) Repeat steps 3-5 for Accounts Payable and other modules you wish to copy.
7) When finished, confirm that you can access all of the databases you have created.
This is the procedure that we strongly recommend and failure to follow it in future could result in fines or government audit charges. Once the data has been retained, we can easily export any data the auditors require to Excel or other data formats that they might need. This simplifies their job and minimizes the amount of time that they need to spend at your company asking you questions.
At the very minimum, burning copies of your accounting data on a CD-Writer or DVD-Writer can also provide this access at a later time if necessary. This is also an excellent off-site backup method for both current and historical data in case of fire, theft or hardware failure. This is always a strong recommendation.
Remember, ignorance of the law is no excuse when the auditors come to call in the future.