QuickBooks Online year-end guide and checklist
- December 17, 2020
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As the end of the year approaches, you need to complete certain tasks in QuickBooks Online to prepare for the new year. Use this guide to complete year-end tasks and end the year smoothly.
Review the first month of your financial year
It's important to check when your financial year starts. This lets QuickBooks Online clear accounting ledgers behind the scenes while you work on other year-end activities. To review or change the first month of your financial year:
- Go to Settings ⚙ and select Account and settings.
- Select the Advanced tab.
- In the Accounting section, select the pencil icon ✎ to change the month in the First month of financial year field.
- Select Save.
- Select Done.
Review customer account balances and send statements
At the end of the year, it's a good idea to check each client's account balance. Make sure this their info is up to date:
- Go to Business overview and select Reports (Take me there).
- In the search bar, enter Accounts Receivable Ageing Summary or Accounts Receivable Ageing Detail and select the report you want to review. Note: These reports are available in QuickBooks Online Essentials and Plus.
- Review the report.
- Identify customers with outstanding balances.
If you find any outstanding balances, send a statement to the customer.
Clear any outstanding deposits
Make sure all pending bank deposits are cleared from the deposit queue. Any payments sitting in the undeposited funds account won't be included in your current year's income.
Here's how to create bank deposits in QuickBooks Online.
Review supplier account balances, pay bills, or write cheques
Take care of any outstanding bills you owe and address outstanding credits, discounts, or products you're owed from suppliers:
- Go to Business overview and select Reports (Take me there).
- In the search bar, enter Accounts Payable Ageing Summary or Accounts Payable Ageing Detail and select the report you want to review. Note: These reports are available in QuickBooks Online Essentials and Plus only.
- Review the report.
- Identify any outstanding bills you need to pay before the end of the year.
Reconcile all accounts (bank, credit card, and petty cash)
You should reconcile your accounts every month to make sure transactions are recorded correctly in QuickBooks. As an added benefit at the end of the year, you'll know you already have accurate data.
Run year-end reports
Review your main financial reports to see how much you've made, identify issues, and check for discrepancies:
- Go to Business overview and select Reports (Take me there).
- Open and review the Profit and Loss report and the Balance Sheet.
- Make sure the Profit for the Year figure matches the balance of the Profit and Loss report.
- Check other reports as needed.
Distribute profits from the business as needed
If your Retained Earnings need to be divided among owners or partners, your accountant should help you.
It's good practice to set up an Owner's Equity and Draws account and track payments or withdraws from the company throughout the year.
Prepare your tax returns with your accountant
Your accountant can give you suggestions, help with your year-end process, and forecast your company’s financial future.
If you haven't already, invite your accountant to collaborate with you. This gives them permission to review and make changes to your books. It also gives them all the financial information they need to prepare and file taxes on your behalf.
Reclassify transactions as needed
Your accountant knows how transactions affect the Profit and Loss or Balance Sheet. If needed, they can make changes and move things around.
Ask your accountant to review your accounts and reclassify transactions as needed.
Your accountant can go in and add or edit transactions from the register. Your accountant can either change the Account that the transaction is in or the class that the transaction is attributed to.
Close your books
When you're ready to finish the year, close your books to prevent unwanted changes before filing your taxes. This locks your books so no one can edit your accounting data prior to the closing date.
This is an important step when you review. Closing your books ensures your financial data stays the way you want it to. It also prevents any accidental changes that could affect your financial reports.
This should be the last step of your year-end review. When you're ready, follow these steps to close the books.