To ascertain net profits or net losses companies close their books at the end of each financial year and record the figures on their balance sheet. Learn how to close books in QuickBooks Online and prevent changes to past transactions. The process requires clinical precision as year-end reports are created while closing the books. Many organizations use year-end reports and financial statements to depict their financial strength to the management and shareholders.
Fortunately for many organizations, QuickBooks Online automatically closes books at the end of the financial year. Make sure to go through the balance sheet while the books are being closed. Discrepancies can be easily noted through balance sheets and other financial statements.
Once the books are closed, users won’t be able to make changes to the figures recorded in that particular financial year. Also, users would require administrative privileges to create a closing date and password for it.
How to Close Books in QuickBooks Online
Follow the below steps to process close books in QuickBooks Online and prevent changes to past transactions.
- Go to the Settings by clicking on the settings icon.
- Select the Company Settings/ Account Settings tab.
- From the given options click on Advance.
- Mark the checkbox that is placed closer to “Closing the Books”.
- Before entering the closing date, make sure to check the policy of your organization. Enter the closing date for your organization.
- Select one between the following options.
- Allow Changes after viewing a warning: A warning will be displayed to the user while they are trying to access or change the information saved for the closing date.
- Allow Changes after viewing and entering a password: Users will require proper authentication along with the password for accessing and making changes to the data for the previous financial years. Create a complex password and change it every 90 days. This will help in keeping trouble at bay.
- Click on Save and Done.
In QuickBooks Online, users can create exceptions to the closing date report. Through this report, every change made to the closing date data can be tracked and traced.
This report can be created by going to Reports > Accountant Reports > Exceptions to Closing Date.
Unlike many other accounting platforms and services, QB Online enables users to make a change to data after closing books. Make sure to tally the income and expense accounts to figure out any other requirements for a change to the data. Still, it is a good idea not to make changes after the books have been closed. QB online only offers this functionality because making changes to the data after closing the books can still make your financial statements more accurate.
