Locking our your prior years records

I have been working with answering questions on QuickBooks forum and I came up with the following QuickBooks Tip of the day:

Entering a closing date for which your books are closed:

This is an interesting feature that is little used. It is also very important. I usually lock out my prior year as soon as the information is sent to my CPA. That way the information I sent him is pristine, since my tax return will be based on that information. After the return is sent, I will enter the closing entries and finalize my records.

Now, what happens if you receive a bill to pay that is dated in the prior year and your CPA has completed the tax return? Well, if you have properly locked out the prior year, you would not be able to enter it (and you do not want to) without using the password. I would then expense it in the current year since your return is complete.

Steps on setting a closing date are as follows:

1. Go to Edit

2. Preferences

3. Accounting

4. Company Preferences

5. Set closing date

It is that easy!