closing the books

Hello hwg1!

Welcome to QuickBooks Community. Closing your books can help prevent changes to past transactions. I'm here to assist you with the credits.

Ideally, you can apply the credits without a warning even if they are from a closed period. You'll want to check the dates when you apply the credits or when you recorded a payment. It could be that you used dates from the past.

You can check this link: Record a retainer or deposit. You can review this on how to properly track the advance customer payments.

Comment below if you need more help with customer credits. We're here to help.

They are only using QBO as an invoicing and revenue software at the moment so I don't really want to set up a liability account for a retainer.

The issue is that the payment was made in a prior period and the credit is being applied in the current period. I guess I am a bit confused as to why this doesn't work without having to use the override password. Nothing is changing with regards to prior period activity.

Thanks for getting back to us, @hwg1.

I'm here to provide additional insights on how you resolve this issue and apply the credit to your customer invoice. 

Creating an invoice on or before the closing date of your company requires you to enter or override your password as this will affect your books. You'll want to ensure you've created the invoice after the closing date to link the credit.

Moreover, you can modify the settings of your close books to allow any changes without entering or overriding your password. Let me show you how:

1. Go to the Gear icon in your QuickBooks Online (QBO) account.
2. Select Account and settings.
3. Go to the Advanced tab.
4. Click the Accounting section.
5. Select Allow changes after viewing a warning from the drop-down menu. 
6. Click Save and then Done to save the changes.

You can also use this link to learn more about closing your books in QBO: Close your books in QuickBooks Online.

Furthermore, I recommend working with your accountant for additional guidance. This way, we can guarantee the accuracy of your accounts after making some changes.

Additionally, I'm adding this resource that can guide you in case you'll need to link a deposit to your invoice: How to link a bank deposit to an invoice.

Need more help with credits and invoices? You're always welcome to get back to me in this thread. Our door is open any time. Have a good one and keep safe!

Hi Jasro,

Thank you for replying. 

I will try to make my question/situation more clear.

I am an accountant and am assisting the business. I don't need another one for additional guidance. I am not trying to post an invoice in a prior period. Closing the books was specifically to prevent that. The issue that I have is that a payment correctly made in a prior period that resulted in an open credit on the customer's account cannot be applied to a new invoice in the current period without the override password. Removing the password would completely defeat the purpose of closing the books in the first place.

From the two responses that I have gotten I have gathered that what I am trying to do is reasonable. Is there as software fix to this? Am I missing something?

Thank you

Thanks for following up, hwg1.

To apply your customer's open credit to a new invoice, you'll need to enter the password you created when selecting Allow changes after viewing a warning and entering a password. If you'd prefer to not have to enter a password, you can use the numeric steps provided by JasroV.
 

In the event you'd like to find a different way to do something with your customer's open credit, I'd recommend working with an accounting professional. If you're in need of one, there's an awesome tool on our website called Find an Accountant. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.
 

Here's how it works:

1. Go to our Find an Accountant page.
2. In the Find an expert in section, choose what you're looking for, then use your search field to enter a City or ZIP code.
   
3. Select Search.
   
4. Browse through the results and find one that works best for your business. You can click on each ProAdvisor's profile to learn more information about them.
   

Once you've found an accountant, they can be contacted through their Send a message form:

1. Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
   
2. Enter your appropriate info in the Your name, Your email, and Your phone number (optional) fields.
   
3. Hit Send message.
   

I've additionally included a couple detailed resources about closing books which may come in handy moving forward:

• Close your books
• Edit your closed books

Please don't hesitate to send a reply if there's any questions. The Community's always here to help. Enjoy the rest of your day!

The term closing the books refers to an accounting procedure that happens at the end of each month or designated company period, and at the end of each year. The Procedure. Financial transactions today are typically recorded in accounting software, but years ago they were recorded in accounting books.

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