Closing Your Books

Legacy KB ID: 288

Question

Should I close my books?

Answer

Unlike many accounting systems, QuickBooks does not require you to close your books at the end of an accounting period. Because QuickBooks does not formally close out any accounting period, you can always enter transactions for any time period. A major reason for closing your books in QuickBooks is to restrict access to the transactions of prior accounting periods, so that no one changes the transactions without your knowledge. What happens when your close your books: You set a closing date. Transactions entered before the closing date are protected by a special permission. This lets you control who has the ability to change these transactions. Advantages to not closing your books: * You always have easy access to last year's data, allowing you to view a transaction's details and even make changes to it. * You can create reports to compare this year's data with last year's data. * You can enter transactions whenever you need to, without worrying about whether or not they are from the current period. Follow these instructions if you wish to close your books: 1. If you are using QuickBooks Pro and are in the multi-user mode (otherwise skip to Step 2): Ask other users who are working with the company file to either close the file or quit QuickBooks. Choose Switch To Single-User Mode from the QuickBooks File menu. 2. From the QuickBooks Company menu, choose Set Up Users. 3. Click the Closing Date button. 4. Enter the closing date and click OK. (Optional) To allow another user to edit, delete, or void transactions effective prior to the closing date, do the following: 5. Select the user's name in the User List window, then click Edit User. 6. Click Next until the Changing or Deleting Transactions window appears. 7. Select Yes in response to the question "Should this user also have the ability to change or delete transactions that were recorded before the closing date?"

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