As the year ends, you and your accountant will need to complete certain tasks in QuickBooks to close out the previous year and prepare for the upcoming one.
To help make the transition easier, we've listed the important year-end tasks to guide you through.
Selecting the correct month to start your financial year lets QuickBooks clear accounting ledgers (behind the scene), while you work on other year-end activities.
To confirm or change the first month of your financial year:
- From the Company menu, select My Company.
- Select the pencil icon.
- Go to Report Information. Check if the first month of your financial year is correct to ensure your financial reports use the correct dates.
As the year ends, ensure your client base has updated balances, billings, and payments.
To settle outstanding customer payments, run an Accounts Receivable Ageing Summary or Detail report:
- From the Reports menu, select Customers & Receivables.
- Choose A/R Ageing Summary or A/R Ageing Detail.
- Review the report to identify customers with outstanding balances.
Once you identify outstanding balances, you can send statements to the customers.
To send a statement:
- From the Customers menu, go to Create Statements.
- Choose the appropriate A/R account. Note: QuickBooks displays the A/R Account field only when your chart of accounts contains more than one A/R.
- Check the statement date.
- Select the date period of the transactions.
Note: You can specify the dates or you can include all open (unpaid) transactions as of the statement date.
- Choose the customers you want to print statements for.
- Choose additional options.
- Choose Print or E-mail, depending on how you want to send the statements to your customers.
To make reconciliation easier, ensure you don’t have any outstanding deposits.
The end of the year is the perfect time to take care of:
- Any outstanding bills you owe for the year
- Any outstanding credits, discounts, or products you owe from your supplier/s
To review and pay outstanding bills, run an Accounts Payable Ageing Summary or Details report:
- Under the Reports menu, select Suppliers & Payables (or Supplier & Payables).
- Choose A/P Ageing Summary or A/P Ageing Detail.
- Check the report if you have outstanding bills to pay before the year ends.
It's a good practice to match your QuickBooks data to that of your bank accounts. This ensures all transactions are correct, and your year-end reports display correct financial info.
Before you reconcile, make sure to:
- Back up your QuickBooks company file.
- Enter all uncleared transactions for the statement period.
- Have a copy of your bank or credit card statement.
Your accountant can provide expert advice on data input, help with your year-end process, and forecast your company’s financial future.
Work with your accountant using the Accountant's Copy. You can save the accountant's file locally, and it's also safe to share electronically using the transfer service.
Run year-end reports to review the info, identify and resolve any potential issues.
To run year-end reports:
- From the Reports menu, go to Company & Financial.
- Select Profit and Loss and the Balance Sheet Standard, or any customised reports you may need.
It’s also important to understand how QuickBooks makes automatic adjustments at year's end, in preparation for the upcoming financial year.
If needed, your accountant can help you divide your Retained Earnings among partners or owners through creating a journal entry.
Taxes are typically prepared by a company's accountant.
Sharing the Accountant's Copy file to your accountant gives them access to all the financial info they need to prepare and file your company's taxes. They can also make the necessary changes on it.
QuickBooks Desktop doesn't require you to close the books as part of the year-end process. However, it does offer the use of a closing date password to limit access to the closed accounting period.