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How to Set the Closing Date in QuickBooks QuickTip

Locking the Books in QuickBooks

For most businesses, closing the books occurs some time after the end of the fiscal year—usually within the first couple of months of the next fiscal year, as soon as your business tax forms have been filed. This is done to lock the books, so that users cannot add, remove, or change any transactions. After taxes have been filed based on the information in the system, nothing should ever be changed. Closing the books in QuickBooks does nothing more than lock users out of the previous year’s transactions. At the same time, QuickBooks allows you to configure user rights to enable or disable a user’s ability to see, or even manipulate, closed transactions. Closing the books in QuickBooks does not set the information in cement (as it does in other business accounting software); it can be changed and/or deleted by users with the appropriate permissions. Many QuickBooks users prefer to lock the transactions for the previous year as a way to prevent changes to the data (except by users with the appropriate permissions). If you have set up users and passwords for access to your QuickBooks data file, only the QuickBooks user named Admin can set the closing date and password. Make sure that anyone given the password understands the bookkeeping ramifications of changing a transaction in a way that might change the totals you used for tax preparation. To close the year and lock the books:

  1. Choose Edit | Preferences from the QuickBooks menu bar.
  2. Click the Accounting icon on the left pane to open the Accounting preferences, and click the Company Preferences tab.
  3. In the Closing Date section of the dialog, click the Set Date/Password button
  4. In the Set Closing Date and Password dialog, enter the closing date (the last date of your fiscal year) and a password.
  5.  If you want to keep estimates and other transactions open check the Exclude Estimates, Sales Orders And Purchase Orders From Closing Date Restrictions option.
  6. Click OK to save these changes.
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