{"id":31511,"date":"2024-10-22T16:00:08","date_gmt":"2024-10-22T20:00:08","guid":{"rendered":"https:\/\/www.method.me\/?p=31511"},"modified":"2024-12-10T17:14:58","modified_gmt":"2024-12-10T22:14:58","slug":"close-books-quickbooks-online","status":"publish","type":"post","link":"https:\/\/www.method.me\/blog\/close-books-quickbooks-online\/","title":{"rendered":"How to close books in Quickbooks Online and maintain financial security"},"content":{"rendered":"\n

Closing your books in QuickBooks might sound a little tedious (maybe even a little boring), but it\u2019s one of the most important ways to protect your business.<\/p>\n\n\n\n

When you close your books, you lock down your financial reports, keeping them safe and correct for the next big financial milestone.<\/p>\n\n\n\n

And yes, this process keeps your accounts error-free, meaning when tax time rolls around, there won\u2019t be a mad scramble to reconcile.<\/p>\n\n\n\n

Let\u2019s walk through how to close books in QuickBooks Online with some detailed steps, learn why it matters, and understand how to do it right.<\/p>\n\n\n\n

What does it mean to close books in QuickBooks Online?<\/h2>\n\n\n\n

In QuickBooks Online, closing your books means finalizing your journal entries<\/a> and locking in your company file for a specific period (usually a fiscal year). <\/p>\n\n\n\n

Once you close your books, no one (even the company admin) can access and edit any past transactions without unlocking them first.<\/p>\n\n\n\n

Why is this so important? Because once you close your books, all the information within your financial reports stays the same and doesn\u2019t get adjusted or changed.<\/p>\n\n\n\n

Put it this way: if someone were to get in and make even a small tweak to last year\u2019s numbers, your taxes will get messed up and you\u2019ll have to spend time balancing the books again. <\/p>\n\n\n\n

Doesn\u2019t sound like a good use of a Sunday afternoon, right? Well, that\u2019s precisely the kind of problem closing the books can prevent.<\/p>\n\n\n\n

When you should close your books in QuickBooks Online<\/h2>\n\n\n\n

At the bare minimum, you should aim to close your books annually to keep your records accurate. For the best results, close your books every month.<\/p>\n\n\n\n

Monthly book closing means your bookkeeping stays up to date and ensures you\u2019re more than prepared for tax season and even the dreaded audit if it comes your way. It also means that you\u2019re being diligent and running accurate reports on your company\u2019s financial health, making it easier to catch errors early.<\/p>\n\n\n\n

Best of all, your accountants<\/a> will absolutely thank you for it.<\/p>\n\n\n\n

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Grow your business without leaving QuickBooks Online.<\/h3>\n\n\n\n
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Build on QuickBooks<\/a><\/div>\n<\/div>\n<\/div><\/div>\n\n\n\n

How to close your year-end books in QuickBooks Online<\/h2>\n\n\n\n

Now, let\u2019s get into the step-by-step process of closing your books in QuickBooks Online. These detailed steps will make sure everything is locked down and accurate before the start of the new fiscal year.<\/p>\n\n\n\n

Step 1: Confirm the first month of your financial year<\/h3>\n\n\n\n

Begin by confirming the first month of your financial year. You must confirm this because QuickBooks uses this month to adjust your company file.<\/p>\n\n\n\n

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  1. Go to the gear icon (settings) and then select \u201cAccounts and Settings.\u201d<\/li>\n\n\n\n
  2. Under the Advanced tab, click the pencil icon next to \u201cAccounting.\u201d<\/li>\n\n\n\n
  3. Choose the correct month from the drop-down menu labeled \u201cFirst month of fiscal year.\u201d<\/li>\n\n\n\n
  4. Click \u201cSave.\u201d<\/li>\n\n\n\n
  5. Click \u201cDone.\u201d<\/li>\n<\/ol>\n\n\n\n
    \"A<\/figure>\n\n\n\n

    Image credit: <\/em>QuickBooks<\/em><\/a><\/p>\n\n\n\n

    Step 2: Review your accounts<\/h3>\n\n\n\n

    Before closing your books, you need to make sure all of your accounts are in order. This will include entering anything missing, like invoices, expenses, or payments.<\/p>\n\n\n\n

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    1. Check all journal entries and make sure no adjustments are needed.<\/li>\n\n\n\n
    2. Review your expense accounts to make sure that everything is categorized correctly.<\/li>\n\n\n\n
    3. Don\u2019t forget to check for any balances that are outstanding in reports<\/a>.<\/li>\n<\/ol>\n\n\n\n

      Step 3: Reconcile bank accounts, credit cards, and petty cash<\/h3>\n\n\n\n

      Next, you will need to make sure that all your financial accounts are fully reconciled<\/a>. This includes bank accounts, credit cards, and petty cash. <\/p>\n\n\n\n

      Use the reconciliation tool included with QuickBooks online to check that all transactions match up. Watch the video below to see how, or simply follow the steps underneath.<\/p>\n\n\n\n