Starting Fresh: ERP Checklist for the New Financial Year

As we approach the new financial year, it's the perfect time to ensure your ERP system is ready to support your business goals. Whether you're in manufacturing, trading, or job work, a well-prepared ERP system can make the difference between a chaotic April and a smooth transition into the new year.

This comprehensive checklist will guide you through all the essential tasks to complete before March 31st, ensuring your business starts the new financial year on the right foot.

Phase 1: Financial Year-End Closing (Complete by March 25th)

The first phase focuses on ensuring all financial transactions are properly recorded and reconciled before the year ends.

Accounts Receivable Cleanup

• Review outstanding invoices: Identify all unpaid customer invoices and follow up on overdue payments
• Write off bad debts: Process any uncollectible amounts as per your company policy
• Reconcile customer ledgers: Match your records with customer confirmation letters
• Apply unapplied payments: Ensure all received payments are properly allocated to invoices

Accounts Payable Settlement

• Process pending vendor bills: Enter all received invoices into the system
• Verify vendor balances: Reconcile with vendor statements
• Plan TDS payments: Ensure all TDS deductions are deposited before due dates
• Clear advance payments: Adjust advances against final invoices

Bank Reconciliation

• Match all transactions: Reconcile every bank account with statements
• Clear stale cheques: Review cheques outstanding for more than 3 months
• Verify petty cash: Count and reconcile petty cash balances
• Document discrepancies: Investigate and resolve any differences

Phase 2: Inventory Management (Complete by March 28th)

Accurate inventory valuation is crucial for financial statements. Your ERP can help you conduct a thorough inventory audit.

Physical Stock Verification

• Schedule stock count: Plan physical verification for slow-moving days
• Generate stock reports: Print location-wise and item-wise stock reports from ERP
• Count and verify: Match physical count with system quantities
• Investigate variances: Identify reasons for discrepancies
• Post adjustments: Make necessary stock adjustment entries with proper approvals

Inventory Valuation

• Review costing method: Ensure consistent application of FIFO/weighted average
• Update standard costs: Revise standard costs for the new year if applicable
• Identify slow-moving stock: Flag items with no movement in 6+ months
• Create provisions: Make provisions for obsolete or damaged inventory

Phase 3: GST Compliance Check (Complete by March 30th)

GST compliance is critical for Indian businesses. Use your ERP to verify all GST-related matters are in order.

GSTR Reconciliation

• GSTR-1 verification: Match all outward supplies with filed returns
• GSTR-2A/2B reconciliation: Verify ITC claims against supplier filings
• GSTR-3B review: Ensure accurate liability and ITC reporting
• Annual return preparation: Gather data for GSTR-9/9C filing

E-Invoice and E-Way Bill Audit

• Verify IRN generation: Confirm all applicable invoices have valid IRN
• Review E-Way Bill compliance: Check for expired or cancelled E-Way Bills
• Document exceptions: Note any invoices where e-invoice wasn't generated

Phase 4: System Preparation for New Year (Complete by March 31st)

Prepare your ERP system to seamlessly transition to the new financial year.

Master Data Review

• Update tax rates: Apply any new GST rates effective from April 1st
• Review price lists: Update selling prices for the new year
• Clean inactive masters: Archive or disable unused customers, vendors, and items
• Update credit limits: Review and revise customer credit limits based on payment history

Number Series Configuration

• Create new series: Set up invoice/voucher number series for the new financial year
• Define starting numbers: Configure starting sequence for all transaction types
• Test new series: Create test transactions to verify proper numbering

User Access Review

• Audit user list: Remove access for employees who have left
• Review permissions: Verify role-based access is appropriate
• Update passwords: Enforce password reset for security compliance

Phase 5: Planning for Growth (April 1st to 7th)

With the housekeeping done, focus on leveraging your ERP for business growth in the new year.

Set Up Budgets and Targets

• Create department budgets: Enter budget figures for each cost center
• Set sales targets: Define monthly/quarterly targets by salesperson or region
• Configure alerts: Set up notifications for budget overruns
• Plan cash flow: Create projected cash flow based on expected receivables and payables

Review and Optimize Workflows

• Analyze bottlenecks: Review approval delays from past year
• Streamline processes: Simplify workflows that caused issues
• Add automation: Identify manual tasks that can be automated
• Update approval matrices: Revise authorization limits if needed

Timeline Summary

How ApicalERP Simplifies Year-End

ApicalERP is designed to make financial year transitions seamless for manufacturers, traders, and job work businesses:

• One-Click Year Creation: Create new financial year and carry forward balances automatically
• Built-in Reconciliation Tools: Bank, vendor, and customer reconciliation modules
• GST Compliance Dashboard: Real-time GSTR reconciliation and ITC tracking
• Inventory Valuation Reports: Multiple valuation methods with detailed stock aging
• Audit Trail: Complete transaction history for smooth audits
• Budget Module: Set and track budgets with variance analysis

Conclusion

A well-planned financial year-end process ensures accurate books, smooth audits, and a strong foundation for the year ahead. By following this ERP checklist and starting early, you can avoid the last-minute scramble that so many businesses face in March.

Remember, your ERP system is your most powerful ally during this period. Use its reporting, reconciliation, and automation features to make the transition as painless as possible. And if you need any help with year-end processes or want to explore how ApicalERP can better serve your business, our team is just a call away.

Wishing you a successful and prosperous new financial year!