Closing out the year in QuickBooks

I thought this may be a timely post.  I have seen many people ask what the procedure is for "closing out the books in QuickBooks".

Well, with QuickBooks, unlike other programs, there really is nothing you have to do. It happens for you "behind the scenes".   Quickbooks automatically posts your net profit/loss to retained earnings so you start with fresh zero'd out income and expense accounts in your new fiscal year.

Here are a few of the things I do to close my books:

• Make sure all bank accounts are reconciled.
• Run a P&L detail report to make sure that all transactions are properly accounted for and if applicable, classed properly.
• Go through all liability accounts.  Recheck end of year balances with loan statements from the bank.
• Make sure depreciation entries have been made to assets.
• Check any prepaid accounts, like insurance, and make sure their balances are correct.
• Double check your payroll entries, especially if you do payroll manually.
• Check all accounts payable.  Run an A/P aging summary report.  Make sure balances are correct.
• Check all accounts receivable.  Run A/R aging summary report.  Make sure balances are correct.

Once I am sure my records are in order, I lock out the year by going to edit, preferences, accounting, set closing date password.  Then I send my file to the accountant by sending an accountant's file or a portable file, depending on my client.

I generally like to get the records to the CPA as soon as possible.  That way he/she has time to work on them before the mad rush of tax season.  For the most part, I get them to the CPA around the third week of January.

Then I prepare my 1099's for my subs and any W-2's for my employees ASAP.

That is it!  But it is a lot of work doing each file and it is time consuming.  So the busy time of my job is fast approaching.  The only final thing I do to each file is check the DB fragments by clicking F2 while in the file.  I like to keep my customer data files in good order.   You can refer back to a prior post regarding that type of "housekeeping".

So Happy Holidays to everyone out there!  And a Happy and Prosperous New Year too!

Lynda            

Check out my website www.artesanibookkeeping.com