12: Setting A Closing Date In QuickBooks Desktop And QuickBooks Online Prevents Accidental Bookkeep


When you are a small business owner or bookkeeper recording transactions in QuickBooks Desktop or QuickBooks Online, it can be very easy to accidentally enter the wrong date…especially if you are recording a lot of transactions from the past or catching up on your bookkeeping. To make sure you don’t record any entries in a period that has already been closed, be sure to follow these steps to maintain the accuracy of your previously prepared financial statements. This is a tip I tell my clients about and many of them didn’t know this was available. They absolutely love it and it prevents them from entering incorrect dates. You don’t want to be entering a date in an incorrect period…especially if the tax return for that entity has already been filed for that time frame. Grab a notebook and listen in, I’m giving you all the details on setting a closing date in QuickBooks Desktop and QuickBooks Online…


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Show Notes:


When you are a small business owner or bookkeeper recording transactions in QuickBooks Desktop or QuickBooks Online, it can be very easy to accidentally enter the wrong date…especially if you are recording a lot of transactions from the past or catching up on your bookkeeping. To make sure you don’t record any entries in a period that has already been closed, be sure to follow these steps to maintain the accuracy of your previously prepared financial statements. This is a tip I tell my clients about and many of them didn’t know this was available. They absolutely love it and it prevents them from entering incorrect dates. You don’t want to be entering a date in an incorrect period…especially if the tax return for that entity has already been filed for that time frame. Grab a notebook and listen in, I’m giving you all the details on setting a closing date in QuickBooks Desktop and QuickBooks Online…


Welcome Back…I wanted to share a tip with you today that I know many small business owners and bookkeepers don’t know is available. There is an option in both QuickBooks Desktop and QuickBooks Online where you can select a closing date. This closing date merely means that you don’t anticipate recording any additional transactions through the date you specify. I normally recommend setting this closing date after you have reconciled each of your bank and credit card statements for the month, and especially after the end of the year. It is SO easy to accidentally enter the prior year rather than the new year when you are recording transactions for the new year. For example, you may be recording a check you wrote out on January 10th and rather than entering January 10, 2021…your mind or habit from entering 2020 all year long, has you to enter January 10, 2020…I get it, it’s an easy mistake, and I have been known to do this as well. But, if you set the closing date, your QuickBooks software will warn you that you are trying to record a transaction in a period that has been closed. If you are like me, you’ll just shake your head, change the date and move on. It is a quick and simple way to make sure you are staying on track and recording all your transactions correctly.


So, how do you set a closing date? Well, I know most small business owners and bookkeepers are using QuickBooks Desktop and QuickBooks Online software to do their bookkeeping, so I will step you through the process for both systems. I know listening to a podcast and getting all the steps down might be a little tricky, so please grab a notebook and jot down the steps as I walk you through them. If you’re on a walk, at the gym, driving in your car, taking care of the baby, or even taking a bubble bath and relaxing…I totally understand (and maybe I’m a little jealous of you, if you’re taking a bubble bath), but I don’t want you to be reaching for a piece of paper to write these steps down…just finish whatever you are doing, and head over to www.FinancialAdventure.com and you can get the show notes under my Podcast tab. I’ve got you covered!


We are going to start with QuickBooks Desktop. When you have your company file open, you will simply go to the top menu bar and select EDIT. You will see a drop-down menu and you will want to select PREFERENCES. From here, you will see an option from the left menu bar that says ACCOUNTING. When you select accounting, you will see two tabs toward the top of that box. You will want to click on the COMPANY PREFERENCES tab. In this box, you will see the closing date section toward the bottom. Click SET DATE & PASSWORD. This is where you will enter the date that you would like to close the books through. So, for example, if you just finished recording all your transactions for December, you would select the closing date of December 31, 2020 and I recommend you select setting a password as well. You can set this password to anything you want, but I recommend using something that would remind you that if you make a change you need to let your tax preparer know…especially if you have already given them your information to process your tax return for that period, or if you know the tax return has already been filed. Think of something like the name of your tax preparer as the password so you know when you enter their name, you also need to let them know you made a change in your transactions for that period as well. Once the password is set, you will click OK and then click OK to save everything on the Company Preferences screen. That’s it…easy peasy, simple and in the future, you’ll be warned if you try to enter anything that is prior to that closing date.


Alright, on to all you QuickBooks Online users. Thanks for waiting so patiently. Everything I mentioned previously will apply here, the only difference is the path you will go to get to setting the actual closing date. So, go ahead and open your QuickBooks Online data file. You will click on the little gear looking icon in the upper right-hand side of your screen. This will open a menu for you and you will want to select ACCOUNT & SETTINGS under the Your Company column. From here, you will select ADVANCED from the left menu bar and under ACCOUNTING, you will see CLOSE THE BOOKS. You should see a little pencil icon to the right of that section. When you click on this edit pencil icon, it will take you to a screen where you will be able to enter the date you want to close the books for. I also highly recommend you select the “Allow changes after viewing warning & entering a password” option. This will force you to enter your password before QuickBooks Online will accept your transaction. Again, if you are recording a transaction from a closed period you will need to let your tax preparer know, especially if you have already given them your information or if the tax return has already been filed. From here, you will confirm your password and then select SAVE, to save your changes.


Alright, to recap this episode, setting a closing date to prevent you from accidentally recording transactions into a prior closed period is a simple and easy way to ensure your financial statements are reflecting accurate information. You can get these detailed steps I went over in this episode for setting this closing date in either QuickBooks Desktop or QuickBooks Online at our website www.FinancialAdventure.com. This is where we have all the show notes for our podcasts and while you are there, be sure to sign up for our 5 Essentials For Stress Free Bookkeeping and our Online Virtual Bookkeeping Business Starter Guide. Both are free and are full of great information for small business owners as well as bookkeepers and those of you wanting to start an online virtual bookkeeping business.


And, you know I’m going to ask…what’s at least one thing you will take away from this episode that will help your business succeed and grow your bottom line? If you need some accountability, join our PRIVATE Facebook community and post your action item, we’d love to support you.

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