Question

Year-End Close-Out

Forum|Forum|5 years ago
February 18, 2021
1 reply
67 views

I have recorded my closing entries on the first day of the next year. So that I can continue to pull Trial Balance at the end of the year without losing my P&L balances. Closing them out would bring balances to zero.

Is there another way in QB to record close-out entries?

I read that QB automatically does those entries, I have not seen this....

QuickBooks Online

JenoP

QuickBooks Team

Hi there, Bert2021.

QuickBooks will automatically adjust your Income and Expense accounts at the end of the year to zero them out and you start your new fiscal year with zero net income. This happens when you close your books in QuicBooks Online. It essentially increases your Retained Earnings equity account by the previous year's net income and decreases your net income by the same amount. This way, you start each new fiscal year with a net income of zero.

Here's how:

Go to the Gear icon ⚙ and select Accounts and Settings.
Proceed to the Advanced tab.
Click Edit ✎ in the Accounting section.
Look for Close the books and slide the status bar to the right.
Enter a closing date.
Select the Allow changes after viewing a warning and entering a password option from the drop-down menu if you want to require a password before editing your closed books.
Click Save.

Let me share these articles with you for more details and reference:

Please don't hesitate to reach out to us again or reply below if you have follow-up questions.

C

ChristyV

This was incredibly helpful and I was able to change the settings to close out year end. But what do I do after that? Do I run a final P&L and Balance sheet, etc. Not sure what my next steps are for everything to show up in my QB Online account. Any help is much appreciated.

K

Kurt_M

QuickBooks Team

I hope you're doing well, @ChristyV. I'll be more than happy to guide you and share some insights on your tasks after changing the closing books period of your company in QuickBooks Online (QBO).

Since you've modified the period for closing your books, you now have the time to scan through the data inside your company file. You can review transactions with your customers and check your business accounts to ensure they contain accurate data. You can also make changes within your files inside your company if you have items that you want to correct.

I'd also recommend running the profit and loss report to check if the figures are accurate. I'll gladly input the steps below so you can proceed. To begin, here's how:

Access your QuickBooks Online company.
On the left navigational bar, go to the Reports tab.
In the Search bar, type Profit and Loss and then select the report in the search result.
Use the filter option if you want to view data from a specific period.

If you want to a more enhanced and data wise version of the report, you have the option to customize it. You can refer to this article for more information: Customize reports in QuickBooks Online.

Additionally, you can visit this page to for further guidelines about the year-end processes in QBO: Year-end guide for QuickBooks Online.

You can also visit this article to learn more about closing books: Close your books in QuickBooks Online.

It's always a pleasure to have you here, @ChristyV. I'll be thrilled to assist you again if you have any additional QuickBooks-related concerns. Don't hesitate to post them here in the Community space. Take care, and more power to your business!

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