QuickBooks is an accounting tool that can be used to organize business financial information. QuickBooks has different editions such as pro, premier, and enterprise. These editions are available in desktop and online. Also, QuickBooks has different versions available in the market. In this post let us discuss the how to close the book in QuickBooks Pro.
One of the features of QuickBooks that it allows closing the books for a given year. Whenever at the end of the year, you make all your entries and you no longer want to change anything. Closing the books in QuickBooks lets you set a password for a closed book.
In order to open or change records from a closed year, a user needs the password for that. If you want to close a year’s books, you need to set a date through the Accounting Preferences dialog. Before discussing how to close the book in QuickBooks Pro, let us discuss what exactly it means closing the book in QB.
Meaning – to Close the Book in QuickBooks Pro
Before proceeding further about how to close the book in QuickBooks Pro, let us discuss meaning of closing books in QB pro. Closing the books, in QuickBooks Pro means that you have finished working on current books and want to open new books for the next month.
Closing the books in QuickBooks pro means zeroing out your Expense and income accounts and calculating the company’s Net loss or profit onto the Balance Sheet.
At the end of the year, QuickBooks pro automatically closes out the Income and Expense accounts and calculates your net loss or profit into your Retained Earnings account.
Along with this accounting process, we also have an additional feature in QuickBooks pro called closing the Books. The main purpose of closing the books is to protect your previous transactions from being changed. This is done by setting up a password to edit the past transactions past.
Why Close the Book in QuickBooks Pro?
Before proceeding further about how to close the book in QuickBooks Pro let us check out the reasons for closing the book in QB pro.
- You can use the password for the closing file that will protect your important data. This will help for security purposes. This will prevent any malicious changes to your transactions that alter account balances of the closed accounting period.
- You can check all the changes made to your transactions dated on or before the closing date
- You can run reports based on the transactions you entered previously and based on these reports you can make the decisions related to your business.
- Closing the books will protect your data, and prevents you from making changes
How to Close the Book in QuickBooks Pro
Let us discuss some of the steps for how to close the book in QuickBooks Pro
- The first step is to Choose the Gear icon
- Select the Company Settings and click on Account and Settings.
- Choose Advanced setting options.
- In the Accounting section, you have to click on the Edit icon.
- In this step, you have to checkmark the Closing the Books checkbox.
- You have to enter a closing date. Transactions dated on or before the closing date cannot be changed without notification.
- It’s up to you to decide what permissions you want to give your users to see
- You need to select Allow changes after viewing a warning to make a warning message appear.
- Choose Allow changes after viewing a warning and enter a password to make the user also enter a password. You need to enter the password two times in the given boxes.
- Click Save then Done.
Can we make changes to QuickBooks after we have closed the Books?
If you want to preserve the integrity of your financial data in QuickBooks then there is no need to make changes to QuickBooks after we have closed the Books. So it’s good that we don’t make any changes to QuickBooks after closing the books.
However, if you forgot to enter a transaction and you want to make changes in transactions in closing files, you need to enter the password to proceed further. This would be of great use for security purposes.
Can we share the closing password with the other employees of your company?
The answer is big no! There is no need of sharing the password with your employees. Because if you share the password then anyone can make changes in the data that is closed and it can be quite confusing
Do you need any other steps to close the books in QuickBooks online?
You just have to follow the steps that are discussed above under the heading how to close the book in QuickBooks Pro. So, no, that’s all you need to do. At the end of the year, QuickBooks automatically closes out file and reports all losses and expenses. You don’t have to worry about doing everything manually.
So we have discussed how to close the book in QuickBooks Pro and all the related information related to it. If you have any questions and queries related to this topic you can directly call the tech support team of QuickBooks. You can call them on their helpline number for quick communication. you can also contact them by sending your queries to their email.