Overview

A fiscal tax year is a 12-month period that ends on the last day of any month except December. For example, if the start of fiscal year date is 12/012024, the end of year date will be 11/31/2025.

When exporting Drake Accounting 2025 to the tax software, you will export it to Drake Tax 2024. The other accounting option is a calendar tax year, which is January through December.

To identify a client as a fiscal year client in Drake Accounting, go to Client > Add or Edit > Business Information tab and set the Start of Year Date to something other than January 1.

The following scenario is used to explain using a fiscal year client in Drake Accounting:

• The client’s fiscal accounting year is from August 1, 2024 to July 31, 2025. Use the appropriate dates for your client’s fiscal year.

• You process AP, AR, and payroll for this client and are keeping their books (a Chart of Accounts is set up in Drake Accounting for this client).

In Drake Accounting 2024

1. Enter transactions for August 1, 2024 through December 31, 2024.

2. Next, post transactions to the General Ledger. Go to Accounting > Transactions > Unposted. Click Post.

In Drake Accounting 2025

1. After installing Drake Accounting 2025, bring the client forward from Drake Accounting 2024 to Drake Accounting 2025. In Drake Accounting 2025, go to Client > Update Prior Year.

2. Continue using Drake Accounting 2025 for this client’s accounting work.

3. At the end of their fiscal year (July 31, 2025), close the client’s fiscal year in Drake Accounting 2025:

   • Post all transactions to the GL (Accounting > Transactions > Unposted. Click Post)

   • Close the year (go to Accounting > Year End Close).

Payroll, Payables and Receivables for the current business year will be entered as usual.

• Review Employees > Options and verify that Generate Accounting Transactions is cleared, not selected.

• Review Payables > Options and verify that Generate Accounting Transactions is cleared, not selected.

• Review Receivables > Options and verify that Generate Accounting Transactions is cleared, not selected.

Live and ATF Payroll for employees will be entered in Drake Accounting 2025 for the 2025 withholding calculations. Quarterly reports (Forms 941) will be created in Drake Accounting 2025.

Once payroll is entered in Drake Accounting 2025, run payroll reports in Drake Accounting 2025 to have the information needed to manually enter transactions in Drake Accounting 2024 journals. This will create accurate financial reports in Drake Accounting 2024 for the fiscal year.

If you choose to create the payroll in Drake Accounting 2024 for 1/1/2025 to 7/31/2025, you will need to manually override the calculations using the changes made by the Federal, State and local withholdings as applicable.

Writing the payroll for 2025 in 2024 will allow you to use the Auto Post features for Payroll or the Bookkeeping Payroll Journal in 2024. If you use this option, you will need to create a payroll report so the payroll information can be entered in Drake Accounting 2025 for quarterly reports, Forms W-2 and year end 94x reporting. You can use ATF payroll for these entries, as individual check entries, monthly batch, or quarterly batch check entries per employee.