It is most important to just close all the entries in QuickBooks at the end of the fiscal year for best & proper management of the accounts and prepares amazing plans for the new year. And for doing this, you have to simply transfer all the expenses & income accounts to employed earnings account. In QuickBooks accounting software, there is no fixed closing that is just done at the end of the month and also at the end of the year. However, to simply manage & maintain all the accounting books properly and correctly, it is most important to do correct & proper QuickBooks closing entries at the end of the financial year. And with this, in QuickBooks software, all the data stays forever. And it will not be simply removed or deleted until you condense it.
If the books are not simply closed correctly, so, in that case, it always provides an option for many of the QuickBooks users to simply go and change it. Therefore, it is most important to just close all the entries in QuickBooks software. And here in this blog, we will discuss some of the most essential and different features of QuickBooks year-end closing entries.
Some Important Points for QuickBooks Closing Entry
- The QuickBooks closing entries are simply made after when you have just recorded all the adjusting entries. And if the books are already ‘closed’ so, at that time, you should not enter any type of entry for the fiscal year.
- On some of the times, you will simply see any programs. And that will just stop you from making a QuickBooks closing entry. And this might occur even for the entry that aims to perfect & improve your books.
- QuickBooks Desktop allows you to simply enter a complete transaction that will just affect & move the closed fiscal year balance. And in such type of situation, the program will simply tell you what is not supported, or it will just ask for the ‘closing date password’ that you have simply set up.
- With all of this, the QuickBooks Desktop does not have an original transaction for QuickBooks closing entries that got generated automatically. And whenever a report is simply run, all the program is just evaluating the adjustments.
What is the Main Purpose of QuickBooks Closing Entries?
QuickBooks closing entry means simply adjusting any types of all the company’s accounts. The complete transactions are just reported to know whether the company’s employed earning account simply reflects any real improvement in revenues from the past year and just show interest in adjustments payment and all the incomes & expenses.
While employed earnings are those earnings that are not simply divided amongst stockholders in the form of shares and are retained for more best & amazing investment in sales, supplies or equipment, production, and also some of the ad purpose.
Also Read:- QuickBooks Journal Entry
What are Automatic Year-End Adjustments in QuickBooks Software?
Rely on the fiscal year’s beginning month simply called the automatic year-end adjustments in QuickBooks accounting software. And the main function of this program is to simply and quickly adjust expense & income accounts to zero them out so that you can easily start with a ‘new fiscal year’ with zero net income.
And on the last or final day of your fiscal year, you can simply see all the net income in the property section of the QuickBooks software balance sheet. With all of this, the best QuickBooks desktop always improves your employed earning investment amount from the past year’s net income on the very first day of the fiscal year.
Finally, it also reduces all the net income by this same amount. And the complete process just enables you to simply start the new fiscal year with the ‘zero net income.’
How to Simply Close the Year-End in QuickBooks Software?
Closing the year is one of the most necessary and mandatory steps that have to be simply performed once at the year-end. And after closing the year-end in QuickBooks, at that moment, you just send the file to your CPA. And always make sure that all the data does not simply change and the data is just entered for the correct & perfect period. With this, if any type of mistake is just done at this stage, so, at that time, it will simply lead to much work for the CPA in the following year.
As we all know that the QuickBooks is data-driven accounting software and any kind of mistake in the dates filled in will just lead to large discrepancies or errors. If, however, you simply get such types of issues because of some reasons there is a simple way to just correct it.
And here we are simply discussing some of them. Also, we explained how can you correct this problem or issue. Just come with us….
Easy Solutions to Correct the Closing Date Mistake in QuickBooks
100% accuracy in QuickBooks accounting books gradually depends on how perfectly and correctly the ‘dates’ of the many transactions have been simply put in. And if any errors or discrepancies are just including all the data, so, in that case, it can simply lead to incorrect QuickBooks accounting books. To correct or fix this issue, you have to just carry out some of the very easy & quick steps for QuickBook’s year-end closing.
First of all, simply set the closing date and also password in the company preferences section. And after doing that, you can just see your past year complete information by simply entering the password. Once you are just logged-in then, simply follow the following steps which are given below:-
- Just doa click on the edit option.
- In this step, simply navigate to preferences to just view the closing date option.
- After that, simply choose the ‘company preferences’ in the ‘accounting preferences’ tab.
- And finally, just fill in all the date and password which you are simply selected.
Reports that can Always Help in QuickBooks Closing Entries Mistake Troubleshooting
Simple Audit Trail Report:- This audit trail report has all the file complete transactions, deltions, history changes, and many more things. If the user ID is simply set up for each & every person that just entered complete transactions in QuickBooks software, and, at that time, all these effects simply appear in the QuickBooks audit trail report. And then, you can easily & quickly find who has made what changes.
The Closing Date Exception Report:- This amazing report always helps in just locking or simply fixing all the data files to hinder QuickBooks users from doing any type of changes on or just before a particular date. Therefore, you can easily and quickly see all the important modifications which are just done on or before the closing date by referring to this wonderful report.
Deleted Transactions Report:- QuickBooks accounting software 2005 and the new versions simply generate an activity log for the voided or just deleted transactions. And in case, if you are simply looking for any kind of complete transactions, so then you directly refer to this report. And to simply access this:-
- Make a double-click on the transaction option, and after that, you can simply see all the relevant data or information which are just related to it.
The Employed Earning Quick Report:- This one of the amazing features is only available in QuickBooks software 2005 and all the new & excellent versions. This great report simply shows all the data & information on many of the exchanges that are there on the employed earnings. And to just obtain this most useful report, simply follow the steps. The steps are as follows:-
- In the very first step, just do a click on the lists menu option.
- Now, simply navigate to COA.
- And after that, just make a double tap on the ‘retained earnings’ option.
- Finally, simply view the passages which are just mistakenly made to the retained earnings account. And then, double tap on this section to simply edit and revise it.
Important Tasks to Perform at the ‘Year End’
To make sure a complete error-free QuickBooks year-end closing, it is most important to simply perform particular tasks during the year. And here we are just listing some of the most necessary & easy steps that you should complete before QuickBooks closing entries. Meanwhile, always make sure to just perform the below simple tasks.
- First, just review ‘working trial balance’ to simply view all the important modifications which are just done in the past year’s affecting retained earnings.
- Second is, just analyze and review COA for new & recent changes or unnecessary records.
- And then, simply review the accounts payable option.
- In this step, just review customers and vendors to simply see all the missing data, big or small mistakes, etc.
- Then, simply see all the complete payroll transactions and the payroll item is just set-up.
- Now, just check the QuickBooks audit trail report and after that, simply look for any modified or suspicious exchanges.
- In this step, simply review amounts and complete set-up for inventory items, etc.
- After doing the previous step, just check all the employed earnings quick reports. And then, simply confirm that no adjustments are there from any past year-close or there are any paragraphs that are particularly made to that record.
Also Read:- Merge Vendors in QuickBooks
- Now, just use the clean-up data utility amazing tool.
- And, on the last day, simply perform a physical count of the complete stock and also perform inventory adjustment if needed.
- After that, just view the complete critical reports of the year like P&L statement, balance sheet, and cash flow statement, etc.
- Now, simply send across IRS 1099 to all eligible merchants and then just send all the duplicate to IRS.
- At last, just make a complete backup on a separate drive. And then, you can easily use the server or QuickBooks online complete backup for this.
Planning the Next year
QuickBooks accounting software with its many useful tools always encourages you and your all the customers to simply plan next year efficiently. And for this, you can simply use the below easy ways to just streamline your complete planning process.
Just Use the Cash Flow Projector
The wonderful cash flow projector will always enable you to simply set-up a six-week review of your approaching and active money. With an excellent and organized plan of your money will always make sure correct spending an amazing utilization of the active & approaching money. This best tool just looks at your money, records payable, and sales records.
Use Business Plan Tool
QuickBooks’ business plan excellent tool is the most efficient medium that always enables you to simply plan and perform all the important business projects and activities as per the business needs and requirements.
Simply Create a Budget
Proper planning and budgeting for the financial year will always enable you to just lay a plan for a methodical approach to simply reach your goals. Furthermore, you can easily compare a year’s performance with expenses acquired and a budget set.
In Bottom Line
That’s all for this easy guide. And we hope, now we know all the major importance of well & perfect closing QuickBooks year-end closing entries. Hopefully, this ultimate guide gave you enough & complete, deep information to simply clearly understand all the features and things related to QuickBooks closing entries and it’s amazing management.