To protect transactions in previous accounting periods from being changed, you can “Close the books” and set a closing date and password in QuickBooks Desktop and QuickBooks Online.

You’re a small business owner, and you’ve just sent your QuickBooks data file off to your accountant to complete your tax return for the year ended December 31, 2016. For the next 12 months, you or your staff unknowingly make changes prior to that date – they delete a few invoices, add a few receipts, add a couple old bills from vendors who haven’t been paid, delete a lost payroll check…you know what I mean.. Now your accountant has the December 31, 2017 data file and runs a report from December 31, 2016 to make sure the numbers match from the previous tax return. 

THEY DON’T MATCH!  Now what? 

There’s one REALLY important thing you need to do as soon as you send your file to your accountant: SET THE CLOSING DATE! This prevents users from making changes to QuickBooks, prior to a date you select. Here’s how to do it:

COMPANY > SET CLOSING DATE > Select SET DATE/PASSWORD

Enter a closing date (the fiscal year end). Create a password that users will be required to enter to override the restriction. There’s now also a box to exclude non-posting transactions from the closing date restriction – a fabulous new feature if you use estimates, purchase orders, and/or sales orders. Check it!

Once you set the closing date, you’ll be able to run a CLOSING DATE EXCEPTION REPORT if you ever need to see what changes have been made:

REPORTS > ACCOUNTANT & TAXES > CLOSING DATE EXCEPTION REPORT

Don’t rely on your users to know whether or not changes they’re making will affect a prior period. SET A PASSWORD-PROTECTED CLOSING DATE TO PREVENT CHANGES.

If you find yourself in the scenario described above …give us a call!

We can get your books back to where they were when you sent them to your accountant.

We also recommend that you set the closing date as soon as you’ve filed a sales tax return. In the case of quarterly filers, this means the closing date is changed quarterly.

At Stenson Bookkeeping Simplified we provide bookkeeping training and best practices that make your company and staff the skills to be significantly more effective.  Email, text or phone John L Mottram, at john@stensonfs.com or 214-543-1855 or go to our website at www.stensonfs.com.