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Close your books in QuickBooks Online

by Intuit•95• Updated 2 weeks ago

Learn how to close your books and stop changes to past transactions. This will help you make sure your records are correct and help you file taxes, audits, and report on your finances.

Closing your books prevents any accidental changes that could affect your financial reports.

This article will explain the following steps involved in closing your books:

Review your accounts
Close your books
Next Steps (reviewing your closed books, and what to expect afterwards)

Step 1: Review your accounts

Before closing your books, make sure your financial data is up to date:

Sign in to QuickBooks Online as a primary or company admin.
Review all accounts for completeness and accuracy.
Enter any outstanding invoices, expenses, and payments.
Reconcile your accounts up to your closing date.
Review your inventory quantities for accuracy.

Step 2: Close your books

Go to Settings ⚙ and select Accounts and settings.
Select the Advanced tab.
Select Edit ✎ in the Accounting section.
Turn on the Close the books switch.
Enter a Closing date. Give yourself a comfortable deadline. You shouldn't need to edit any transactions before this date. Your new bookkeeping work will start after this point.
Select the Allow changes after viewing a warning and entering password option from the ▼ dropdown if you want to require a password before editing your closed books.
Select Save, then Done.

Next steps

Review your closed books

Get ready for year-end and check out our year-end guide and checklist in QuickBooks Online. If you're an accountant or bookkeeper, follow this guide and checklist.

What happens after closing your books

Note: The Retained Earnings account isn't the same as the retained earnings line item shown on the Balance Sheet.

When a new financial year begins, QuickBooks Online adds the total income from the previous year to your Balance Sheet. This is called Retained Earnings. Retained Earnings show all your company's income and expenses from all the years before. To learn more, you can find out how to view Retained Earnings account details.

Remember, the Retained Earnings account isn't the same as the Retained Earnings calculation. You can find this as a line item on the Balance Sheet.

Have any other questions for our team? If any of your questions were left unanswered, we'd love to hear them! Pop over to our QuickBooks Community's discussion on bookkeeping processes where you can ask your questions, have them answered by qualified QuickBooks Online experts, and hopefully help others with the same questions out in the process.