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Year-end guide for QuickBooks Online

SOLVEDby QuickBooksQuickBooks Online1032Updated June 22, 2022

Learn about what you and your accountant need to do in QuickBooks Online to close out the previous year and prepare for the new one.

While you're at it, it's never too early to get a head start on payroll. For more year-end info, see the Year-end Checklist for QuickBooks Online Payroll.

It's important to check when your fiscal 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 fiscal year:

  1. Go to Settings ⚙ and select Account and settings.
  2. Select the Advanced tab.
  3. In the Accounting section, select the pencil icon ✎ to change the month in the First month of fiscal year field.
  4. Select Save.
  5. Select Done.

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 Business overview then select Reports (Take me there), or go to Reports (Take me there).
  2. In the search bar, enter Accounts Receivable Aging Summary or Accounts Receivable Aging Detail and select the report you want to review. Note: These reports are available in QuickBooks Online Advanced, Plus, and Essentials.
  3. Review the report.
  4. Identify customers with outstanding balances.

If you find any outstanding balances, send a statement to the customer.

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.

Take care of any outstanding bills you owe and address outstanding credits, discounts, or products you're owed from vendors:

  1. Go to Business overview then select Reports (Take me there), or go to Reports (Take me there).
  2. In the search bar, enter Accounts Payable Aging Summary or Accounts Payable Aging Detail and select the report you want to review. Note: These reports are available in QuickBooks Online Advanced, Plus, and Essentials.
  3. Review the report.
  4. Identify any outstanding bills you need to pay before the end of the year.

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.

Here's how to reconcile accounts and tips for checking everything for the year.

Review your main financial reports to see how much you've made, identify issues, and check for discrepancies:

  1. Go to Business overview then select Reports (Take me there), or go to Reports (Take me there).
  2. Open and review the Profit and Loss report and the Balance Sheet.
  3. Make sure the Profit for the Year figure matches the balance of the Profit and Loss report.
  4. Check other reports 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.

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.

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.

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.

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