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.