In QuickBooks there is nothing that you have to do in order to "close out" the year. QuickBooks will automatically post profit and loss to the retained earnings account. There is one thing that you should do once you are done with the year and your file is either given to your accountant or you file your tax return. This one step is to set a "closing date". After the tax return is finished or your accountant has your file, the information for that year should not change. This closing date will prevent transactions with dates in the year that was closed out. You will receive a warning that you are trying to create a transaction for a year prior to the closing date. You will be required to enter a password in order to proceed. In order to set the "closing date" follow the steps below.
1) Click Edit on the toolbar
2) Select Preferences
3) Choose Accounting
4) Click Company Preferences Tab
5) At the bottom you will see "Set Date/Password"- click on it
6) In Closing Date box enter the date of the year that ended (Ex. 12/31/10)
7) Enter a Password
8) Confirm Password
9) Click OK
After the closing date is set, QuickBooks will not allow you to enter a transaction prior to this date without entering the password.
After a tear is closed out there are a few entries that should be done on the first day of the next year. For more information see "Beginning the Year" post. ( Coming Soon)
QuickBooks Common Questions and Answers!
