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Close your books in QuickBooks Online

by Intuit•930• Updated 3 weeks ago

When you're ready to close out the year, close your books in QuickBooks Online to lock your accounting data and prevent unwanted changes to past transactions before a certain closing date.

This is a key step when you finish looking at the previous year's data. It makes sure your records are correct for filing taxes and reporting.

Step 1: Review your accounts

Before closing, review your accounts and make sure everything looks correct.

Enter any outstanding invoices, expenses, and payments.
Reconcile your accounts up to your closing date.
Review your inventory quantities.

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.

Note: Please ensure that passwords are between 8-16 characters and that non-alphanumeric characters aren't being used. For example: . - $#, !)

What happens after closing your books

When a new fiscal year begins, QuickBooks Online automatically transfers the net income from the back year into the Retained Earnings account on the Balance Sheet. This account reflects the total of your company's income and expenses from all previous years. To learn more, see how to view Retained Earnings account details.

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

Next steps: Review your closed books

Get ready for year-end and check out our Year-end guide and checklist in QuickBooks Online.