Seeking for the procedure to close books and company in QuickBooks desktop and online. Herein, we will be talking about the procedure to close books and company in not only QuickBooks desktop, but also online. This feature of QuickBooks helps in closing the books at the end of the year. Moreover, it is an accounting process of zeroing out the income and expense accounts and recording the company’s net profit or loss into the balance sheet. Before heading further with the process, it is recommended to create an opening balance.
To find out more about closing books in QuickBooks desktop and online, make sure that you go through this article till the end. Or you can also contact our QuickBooks support professionals, and let our experts close your books in QuickBooks and teach you the process.
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Perks of closing QuickBooks or company in QuickBooks
Once the user creates new company data it will affect the previous balance sheet, the user will have to use the close of the book, and the main purpose of this to protect the transaction. The user needs to make use of this feature to set closing date and password command in QuickBooks. This step will lock down all the information so that it cannot be affected by the business.
Steps to close the QuickBooks in QuickBooks pro
The user can perform the below steps to close books in QuickBooks pro.
- The very first step is to choose the gear icon and company setting
- After that choose advanced
- The user should not click on edit icon in the accounting section
- Opt for mark the closing the books checkbox
- Also, enter a closing date
- Transactions dated on or before the closing date cannot be modify without warning
- The user should decide what he/she wishes users to see if they try to save a transaction that is dated prior to the closing date:
- Choose allow changes after viewing a warning to make a warning message appear
- Choose allow changes after viewing a warning and entering a password to make the user also enter a password. Then enter the password in the two password fields below
- Choose save for done
View the changed transaction after closing date:
The user might require to track some transactional changes details even after the closing date.
- Herein, the user needs to click on reports from the menu
- And then select accountant reports and taxes
- Click on closing data exception report and view the required reports
- In this report, the user can see the closing dates and the user who set the closing date.
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Is it possible to make changes after closing QuickBooks?
In case the user wishes to preserve the integrity of the financial data in QuickBooks, then it is not needed to change QuickBooks after he/she has closed it. Thus, it is recommended not to make any sort of changes to QuickBooks after closing books.
In case the user forgets to enter a transaction and then he/she wants to make changes in a transaction in closing files, then the user should enter the password. This would be of great assistance in case of security concerns.
Steps to close books in QuickBooks online
It should be noted that at the end of the year, QuickBooks automatically close out files and reports all losses and expenses. The user needs not to worry about doing it manually.
Adjustments made by QuickBooks at the end year
- For making zero net income in the upcoming fiscal year, QuickBooks make changes into the income and expense accounts in a way so that the outcome is zero.
- And QuickBooks also makes adjustments in the net income entry. For example: in case the previous year’s profit was $12000, then QuickBooks enters a $12000 net income on the last day of the financial year. This an be visible in a line of the equity section
- On the very first day of the next financial year, QuickBooks increases the retained earning equity by the same amount as the previous fiscal year’s net income in this example decreases the net income by the same amount.
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Perks of closing books in QuickBooks
- Restricted access: One of the reasons why one should close the books in QuickBooks is that the user can restrict other users from accessing the previous data including the transactions. The user can create a closing password to enable this QB feature. After doing that, only the user having the closing password and authority will be able to delete transactions from the closed period.
- Reporting: The changes that are made after the closing date to the transactions dated on or before the closing date will appear in the closing date exception report.
Pitfalls of closing the books
- It should be noted that it would not be easy to access the previous year’s transactions. In case required, then the user will have to have the closing date password and authority
- Also, without the permission of the user who set the closing dates, it is not possible to compare reports between the current year and last year.
By the end of this article, we expect that the reader might be able to successfully close the books in QuickBooks desktop. However, if the user isn’t able to for some reason, then getting in touch with our professionals and QuickBooks customer support team is suggested.
The user can simply get in touch with our support professionals right away at 1-844-521-0490, and they will ensure to come up with the most appropriate solutions for you.