end of year

Michelle0531 · ‎December 22, 2022

Good morning -- do I have to close out a year in Quickbooks Online? I am finding different answers for that.

Thank you!

Rasa-LilaM · ‎December 22, 2022

Let me share some insights about closing your books in QuickBooks Online (QBO), Michelle0531

Small business owners must close the books at the end of each year or accounting period to avoid income or expenses from one period transferring into the current period, which could result in inaccurate figures for the current accounting period. At year's end, QuickBooks makes an adjustment to your income and expense accounts to zero them out, ensuring that you have no net income to begin the next fiscal year.

Here's how to close your books:

Sign in to QuickBooks Online (QBO) as a primary or company admin.
In your company, navigate to the Gear icon in the upper right and choose Account and settings under Your Company.
Proceed to the Advanced tab and click Edit in the Accounting section.
Head to the Close the books section and move the slider to the right.
Enter a date in the Closing date field.
Select the Allow changes after viewing a warning and entering a password option from the drop-down menu if you require a password before editing your closed books.
Tap the Save button.

Here's an article that goes into great detail about the procedure: Close your books in QuickBooks Online. It includes a video tutorial to help you complete the steps quickly.

You can also use the following reference to guide you through the process of finishing up specific tasks in time for the new year: Checklist for QuickBooks Online.

If you have any clarifications about closing your books or other QuickBooks-related concerns, leave a comment below and tag my name. I'll get back to help and make sure you're taken care of, Michelle0531.

View solution in original post

Rainflurry · ‎December 22, 2022

@Michelle0531

The only thing that QBO does differently at year-end is that it closes out FY net income to retained earnings. Beyond that, it's up to you to book depreciation, accruals, etc. as you would for any period end.

View solution in original post

Rasa-LilaM · ‎December 22, 2022

Let me share some insights about closing your books in QuickBooks Online (QBO), Michelle0531

Small business owners must close the books at the end of each year or accounting period to avoid income or expenses from one period transferring into the current period, which could result in inaccurate figures for the current accounting period. At year's end, QuickBooks makes an adjustment to your income and expense accounts to zero them out, ensuring that you have no net income to begin the next fiscal year.

Here's how to close your books:

Sign in to QuickBooks Online (QBO) as a primary or company admin.
In your company, navigate to the Gear icon in the upper right and choose Account and settings under Your Company.
Proceed to the Advanced tab and click Edit in the Accounting section.
Head to the Close the books section and move the slider to the right.
Enter a date in the Closing date field.
Select the Allow changes after viewing a warning and entering a password option from the drop-down menu if you require a password before editing your closed books.
Tap the Save button.

Here's an article that goes into great detail about the procedure: Close your books in QuickBooks Online. It includes a video tutorial to help you complete the steps quickly.

You can also use the following reference to guide you through the process of finishing up specific tasks in time for the new year: Checklist for QuickBooks Online.

If you have any clarifications about closing your books or other QuickBooks-related concerns, leave a comment below and tag my name. I'll get back to help and make sure you're taken care of, Michelle0531.

Rainflurry · ‎December 22, 2022

@Michelle0531

The only thing that QBO does differently at year-end is that it closes out FY net income to retained earnings. Beyond that, it's up to you to book depreciation, accruals, etc. as you would for any period end.

AlcaeusF · ‎January 17, 2023

Hello Rainflurry,

I have reviewed the solution you’ve shared and it's correct and accurate. Thank you for sharing your inputs to help address the issue.

We love to see members supporting one another! Have a great day.

garyvp · ‎June 30, 2023

QBO Questions:

1. Is closeout accounting done at the class or only at the company level?

2. Can I set the close out date retroactively - e.g., on July 7th can I go to settings and set the closeout date to July 30th? And how will QBO behave? Will any entries/balances from July 1 and onward be affected?

3. If i choose not to use the QBO closeout function, can I assume that I can still produce fiscal year reports and comparisons just using date ranges?

GVP

jenop2 · ‎June 30, 2023

Hi there, garyvp.

Closing your books in QBO will restrict access to the transactions of the prior accounting period. It means that they can't be edited or changed without a warning or putting in a password.

In other words, the close out feature in the program lets you control changes to transactions dated before the end of the fiscal year. It essentially locks your books so no one can edit your accounting data before the closing date. When you do that it will be applied to entire company and not just in the class level.

For your second question, you can edit the date of the closing period and change it retroactively. QBO will also move the date when the Retained Earnings is posted in your financial reports. Any other balances or entries from July 1 onwards will remain the same. You can read more details about this here: Edit Your Closed Books in QuickBooks Online.

With regards to the last inquiry, you can still run comparative fiscal reports even if you didn't use the close out feature. You just need to run two versions of the report and use two separate periods in the Date section. You can also use these reports to compare data from other periods:

Profit and Loss Comparison
Balance Sheet Comparison
Profit and Loss Year-to-date Comparison

Let me also share these articles for additional guidance:

The Community is always here if you need anything else.

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