QuickBooks accounting software has become one of the most reliable accounting software around the globe. The solution assists the user in all accounting processes like bank processing, monitoring expenses, financial reports, invoices, and more.
QuickBooks offer custom-built templates that can generate bills, reports, and invoices. Business has never been as exciting as with QuickBooks.
As you go on using QuickBooks it is important that you close your entries periodically. You have to check that all revenue, gain, loss, and expense account are closed to retain all earnings, members account and account summary.
QuickBooks Closing Entries
A closing Entry is basically a journal entry recorded at the end of every accounting period. All momentary account balances are shifted to a permanent account in order that it is carried again in the coming period. Closing entries bring the accounting cycle to a whole.
Why you need to close entries in QuickBooks
It is important that you close QuickBooks entries once the year-end is complete or when you have completed sending your files to CPA. You have to ensure that the data remain unchanged and especially that you enter the correct data in the right period. If you enter the wrong data it will create additional work for CPA in the coming year.
Large Business Company that provides financial statements periodically to board member or shareholders must ensure that the statement provided is complete and accurate to their best knowledge. These avoid unnecessary changes to incomplete information in the future.
QuickBooks will automatically create adjustments for preparing your system for the following year. This will keep you relax about closing your entries in QuickBooks by the end of every year.
How to close Entries in QuickBooks
Follow the steps to close Entries in QuickBooks:
- Run the Balance Sheet comparative to the previous year, then compare the tax or financial reports and check the differences
- Review all unclear and all transactions.
- Open Balance Sheet and double-click your mouse on Cash Balance
- Select Customize Report and clear filters
- Open A/R Aging Summary report than review the balance. Enter necessary adjustment
- Review and verify details of all assets disposed and purchased.
- Open inventory and review the valuation report and make an adjustment if necessary
- Verify every activity are entered for the passing year and accommodate every credit card accounts
- Review and compare balance sheet amount in Pay Payroll Liabilities
- Ensure that proper amount of expenses are recorded
- Run Opening Balance Equity and check that account balance is at Zero
- Review all profit and loss, salary, wages, etc related expenses account.
- Keep n mind to post entries even for accruals, prepaid and depreciation
- Select the Company Preferences tab and click on Closing Date
- Set the closing date and the password as well. Check that your closing password is different from the login password.