When your company's year-end approaches your accountant will request various documents to prepare your tax return. An essential piece of information needed is a copy of the business's books. Although many companies have adopted cloud accounting technologies such as Xero, some still use desktop software.
If you are a Sage50 desktop user, you will need to create an up-to-date backup of your files and give that to your accountant. Since this is a once-a-year process, it is easy to forget how to do this, or maybe it's your first time. So we've put together a quick refresher for you.
Why a backup and not an accountant's copy?
This is a great question. After all, it stands to reason that an accountant would need an accountant's copy, right? Not really. Although they are both saved as compressed cabinet files (.CAB), there is a difference between them.
Accountant's copy
An accountant's copy is only helpful if your accountant has an accountant edition of Sage 50. It only allows the accountant to create and post General Journal entries, review transactions and if needed, make corrections to certain entries. Once the file is returned any changes are reincorporated into the original database file and journal entries need to be imported.
You can continue working with the original company data while your accountant works on the accountant's copy, but there are functions that are recommended you do NOT perform while your accountant has a copy of the data such as deleting or renumbering accounts, departments or tax codes. You can only have one accountant's copy at a time. If you create a new copy while a previous one exists, the older version will be cancelled.
Backup copy
A backup copy creates a second copy of the company data. You can create as many backup copies as you would like. The only limit is the amount of storage you have on your device.
It shows the exact state of your books at the time the copy was created. Any changes you make to your working copy after the backup is created will not be reflected in the backup copy. You will need to be careful not to make any historical changes once you have sent your backup copy to your accountant.
Accountant's preference
Many accountants prefer working with a backup copy because it gives them instant access to everything they need in your company's books and allows them the freedom to fix any errors they may find. Once they are finished, they will either give you an updated backup to restore on your computer or more likely, will give you the adjusting journal entries that you'll need to perform in order to update your books to match the trial balance.
How to save a Sage 50 backup file
When you are ready to create a backup file there are two ways to do this. The quick and easy way is to click the little Backup icon found in the top right corner of the screen.
The second, more clicky way, is to open the File menu found in the top left corner and navigate to backup.
Either way will open up the Backup pop-up window. Here you can change the file name, choose the type of backup (local or cloud) and assign comments to the file. To change where your backups will be saved on your computer click Browse.
This opens up the window that allows you to choose where you want to save your backup files. In this case, my backups are saved in a folder called DEMO. Which is saved in the Backups folder, within the Simply Accounting folder found in my Documents folder.
When it comes time to send your backup copy to your accountant, all you need to do is navigate to the save folder you designated earlier and all your backup files will be there waiting for you.
Data security
Remember to be mindful that your backup copy may contain sensitive information.
Some safe ways we recommend to get your copy to your accountant include:
Upload the file onto a thumb drive and physically drop it off.
Upload the file into a secure client portal if your accountant provides one.
Use a secure file-sharing system like ShareFile to encrypt attachments in emails.