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Year-end guide for QuickBooks Online

by Intuit Updated 1 month ago

Learn how to close your previous fiscal year and prepare for the new one in QuickBooks Online.

This helps you identify whether all your financial transactions are balanced and get your business ready for the coming year.

Review the first month of your fiscal year

Check when your accounting period starts. This lets QuickBooks Online clear accounting ledgers while you work on other year-end activities.

  1. Go to Go to Settings Settings gear icon., then select Account and settings.
  2. Select Advanced.
  3. In the Accounting section, select the pencil icon ✎.
  4. Select the First month of fiscal year ▼ dropdown, then select the month where you start your fiscal year.
  5. Select Save.
  6. 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:

  1. Go to Reports (Take me there).
  2. In the Find report by name ▼ dropdown, select Accounts receivable aging summary or Accounts receivable aging detail.
    Note: These reports are only available in QuickBooks Online Advanced, Plus, and Essentials.
  3. Review the report. Then, identify customers with outstanding balances.
    Note: If you find outstanding balances, create and send a statement to the customer.

Clear any outstanding deposits

Clear any outstanding bank deposits from the deposit queue. You can record and create bank deposits if there are still payments in the undeposited funds account. This is to make sure that all payments are recorded in the correct account history in the charts of accounts. 

Note: Undeposited funds in QuickBooks Online are included in the income. You still need to move the funds to the account history that receives the payments or deposits.

Review supplier account balances

Review your supplier account balances and check if you have any outstanding bills, credits, discounts, or products.

  1. Go to Reports (Take me there).
  2. In the Find report by name ▼ dropdown, select Accounts payable aging summary or Accounts payable aging detail.
    Note: These reports are only available in QuickBooks Online Advanced, Plus, and Essentials.
  3. Review the report, then identify the outstanding bills.
    Note: You can pay with a cheque or bill payments to settle any outstanding bills to your suppliers.

Reconcile all accounts

Reconcile all your accounts monthly to make sure transactions are recorded correctly in QuickBooks. This lets you have balanced and accurate data by the end of the year and prepare for tax season.

Here’s the workflow and tips for year-end reconciliation.

Run year-end reports

Run reports to identify issues and check for discrepancies. You can create a management report for profit and loss to see and compare how much you’ve made. Here's how.

  1. Go to Reports (Take me there), then select Management reports.
  2. Select Create management report
  3. In the Template name field, enter a name for the template. 
  4. Fill out other necessary information as needed.
  5. In the Report period ▼ dropdown, select the date range you want to pull the report from.
  6. On the Reports page, enter or select Balance Sheet in the Report dropdown. 
  7. Select Add new report, then enter or select Profit and Loss in the Report dropdown. 
  8. Select Save and close.

Note: Make sure that your current net income matches the figures in your Balance sheet and Profit and Loss reports. If it doesn’t match, here are the possible reasons and recommended solutions.

You can check and run other reports as needed.

Distribute profits from the business as needed

If needed, your accountant can help you distribute retained earnings among partners.

You can also set up an Owner's Equity and Draws account and track payments or withdrawals over the year.

Prepare your tax returns with your accountant

Your accountant can help you with your year-end process, forecast your company’s financial future, and review your books. 

If you haven’t invited yet, you can add your accountant to QuickBooks Online. This allows them to have all the financial information to prepare and file taxes on your behalf.

Reclassify transactions as needed

If needed, your accountant can review your accounts and reclassify transactions. They can add, move, or edit from the register and change the account or class of the transaction. This helps you organize your Profit and Loss and Balance Sheet.

Close your books

After you review all of your financial data, you can close your books for the year-end. It can prevent unwanted changes that may affect your financial reports before the closing date and before filing your taxes.

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