Year-End Guide for QuickBooks Online to Close Books

Are you nearing the end of the year and need to close the books on the previous year and start planning for the next? In this article, you will learn about various tasks which you and your accountant need to perform at the end of the year. Read the information provided below, and if you have any queries, do contact us on +1-818-295-3510.

Accounting is very busy in the final days of the year. You must close the current year’s books and begin planning for the next. By properly handling these tasks, you can smoothly transition from one year to the next.

How to Close your Books in QuickBooks Online

You must first close your books in QuickBooks Online by following the given eight steps.

  • Click on the Gear icon(company name), in the upper right corner.
  • Go to Account and Settings
  • Select Advanced tab
  • From the Accounting section, place a checkmark in the Close the books box.
  • Enter the Closing date
  • Set the password, needed to change and close the transaction
  • Click on Save
  • Click on Done

QuickBooks Online Tasks to Do at the End of the Year

Here’s a step-by-step guide to getting ready for your QuickBooks year-end close.

Confirm and Review the First Month of your Fiscal Year

You should begin with checking your fiscal year, as when it was started. This allows you to work on other year-end tasks while QuickBooks Online clears accounting ledgers behind the scenes. To go over or change the first month of your fiscal year, do the following:

  1. From the Settings ⚙ click on the Account and Settings.
  2. Go to the Advanced tab.
  3. From the Accounting section, you must first check the First month of the fiscal year field. Click on the pencil icon ✎ to change the month.
  4. Click on Save.
  5. Select Done.

Check and Review the Customer Account Balances, Send Statements, and Clear Outstanding Deposits

You must check each client’s account balance and make sure that their information is updated. For checking customer account balance:

  • Navigate to Reports.
  • Enter Accounts Receivable Aging Summary or Accounts Receivable Aging Detail in the search bar and choose the report you want to look at. Note: QuickBooks Online Advanced, Plus, and Essentials all have these reports.
  • Examine the report.
  • Determine which customers have outstanding balances.

For sending a statement:

  • Choose Sales, and then Customers.
  • Find the customer to whom you want to send a statement.
  • Select Create statement from the Action column drop-down menu.
  • Select Print and Preview to print the statement, or Save and Send to create and preview an email to send with the statement to the customer in the Create Statements window.

Clear any Outstanding Deposits

Clear all the pending deposits from the deposit queue. Undeposited funds account payment will not be included in your current year’s income.

Review and Confirm Account Balances, Pay Bills, or Write Checks

Take care of any outstanding bills, as well as any credits, discounts, or products owed to you by vendors:

  1. Select Reports.
  2. Enter Accounts Payable Aging Summary or Accounts Payable Aging Detail in the search bar and choose the report you want to look at. Note: QuickBooks Online Advanced, Plus, and Essentials all have these reports.
  3. Examine the report.
  4. Make a list of any bills that need to be paid before the end of the year.

Reconcile All Accounts ( bank, petty cash, and credit card )

For correctly recording the transactions in QuickBooks, make sure that you reconcile your accounts every month. For reconciling your bank and credit card accounts in QuickBooks Online:

  • Click on Settings.
  • Select Reconcile.
  • Follow the prompts in order to match the transactions on your bank or credit card statement with the transactions on the Reconcile page.

Run Year-End Reports

Check for discrepancies and identify issues to review your main financial reports. Let us now see how to run your year-end reports.

  1. Select Reports
  2. Open to review the Profit and Loss report and the Balance Sheet.
  3. Check that the Profit for the year figure matches the balance of the Profit and Loss report.
  4. Check for the other reports as required.

Distribute Profit from the Business

Get help from your accountant if you want to divide your Retained Earnings among owners and partners. It is a good idea to set up an Owner’s Equity and keep track of payments and withdrawals from the company throughout the year.

Prepare your Tax Return with your Accountant

You must prepare your tax return with your accountant who can review and make better changes to your books. They can give you suggestions that can help with your year-end process to forecast your company’s financial future.

Reclassify Transactions

You can have your accountant review your books and, if necessary, reclassify transactions. Your accountants are well-versed in the impact of transactions on the Profit and Loss or Balance Sheet. If you need to make changes or move things around, your accountant will be able to assist you. They can go in to add or edit transactions from the register. Your accountant can class the transaction or change the account that the transaction is in.

Close your Books

Close your books before finishing the year to avoid unwanted changes before filing your taxes. By doing so, your books will be locked so that no one could edit your accounting data before the closing date. By closing your books, you ensure that your financial data stays the way you want. This will also prevent accidental changes which can affect your financial reports. For closing your books:

  • Click on the Gear icon.
  • Go to Accounts and Settings under the Your Company heading.
  • Click on the Advanced tab.
  • Go to the pencil-shaped Edit icon in the Accounting section.
  • Click on the Close the Books checkbox.
  • Enter the date in the Closing Date field.
  • Enter and verify a password
  • Select Save.

You learned everything you need to know about the various tasks you must complete at the end of the year in this article. Most of the tasks you can do yourself as they are are similar to those you do on a regular basis, but others will require the use of an accountant. If you need further assistance, talk to our ProAdvisor at our toll-free number at +1-818-295-3510.

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