How to Close the Year in QuickBooks™ to Deter Further Data Entry

We’ve arrived at that time of the year when businesses are wrapping up the books and turning them over to their accountant or tax preparer for finalization and tax filing.

In most cases, you don’t want to make any changes to your file after you have given your accountant the go-ahead to finalize the year.*  QuickBooks™ gives you the ability to deter further data entry into a completed year with the Close the Books feature.  This handy option will prompt a warning when a user tries to save an entry prior to the closing date and should be enabled as soon as you have turned your books over to your accountant or tax preparer.  When setting a closing date, you have the option to add a password to help prevent prior-year entries by unauthorized users or to give you a further level of pause if you fear you might bypass the simple warning with a quick click on OK without reading it thoroughly (but that never happens, right?).

Since you can never completely lock down data entry, you will still be able to post your accountant’s year-end adjusting entries, if any.

To set a closing date:

In QuickBooks Online™

1. Click the Gear Icon found at the top right of any Side Menu screen
2. Select Account and Settings
3. Select the Advanced tab on the left
4. Click the pencil icon in the Accounting box
5. Check on Close the Books
6. Enter the last day of your completed year in the Closing Date field
7. Select either “Allow changes after viewing a warning” or “Allow changes after viewing a warning and entering password”
8. If you chose to add a password in Step 7, enter your password in the two fields provided
9. Click Save to exit the Accounting box
10. Click Done to exit the Account and Settings area and return to QuickBooks Online™

In QuickBooks Desktop™

1. Click to open the top row Company menu
2. Select Set Closing Date
3. In the Preferences screen, click Set Date/Password
4. Enter the last day of your completed year in the Closing Date field
5. If setting a password, enter your password in the two fields provided
6. Click OK to exit Set Date/Password
7. Click OK to exit the Preferences screen and return to QuickBooks Desktop™

* Late entries are sometimes large enough to warrant a call to your accountant for a last minute change or an amendment to your tax return, but most small entries can be entered into the next year – check with your accountant to see how they want your late entry handled. 

For assistance with preparing your QuickBooks™ file for year-end or other ways to work with QuickBooks Online™ and QuickBooks Desktop™, contact BookSmarts today!

Michele Craig is the founder of Booksmarts, Central Ontario’s leading supplier of QuickBooks, QuickBooks Online & Wave Accounting Training.

A self-professed ‘accounting geek’, Michele is a Chartered Professional Accountant and Certified Management Accountant with over 25 years experience in implementing and managing accounting systems. She is a certified trainer for adults, a Certified ProAdvisor for QuickBooks™ and QuickBooks Online™ and a member of the Wave Pro Network.

Contact her today at 705-796-6979 for a no-obligation consultation.