Close your books in QuickBooks Online

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Lock your books to prevent unwanted changes to past transactions. Closing your books ensures your financial data remains accurate for tax filings, audits, and financial reporting.

Overview

When you close your books, you set a closing date. Transactions dated on or before this date are locked. If anyone tries to edit or delete these transactions, QuickBooks will either warn them or require a password, depending on your settings.

Step 1: Review your accounts for accuracy

Before you close your books, verify that your financial data is complete and accurate.

1. Sign in to QuickBooks Online as a primary or company admin.
2. Review all accounts for completeness and accuracy.
3. Enter any outstanding invoices, expenses, and payments.
4. Reconcile your accounts up to your closing date.
5. Review your inventory quantities for accuracy.

Step 2: Close your books

Once your accounts are reviewed and reconciled, you can set the closing date in your settings.

1. Go to Settings , then select Account and settings.
2. Select the Advanced tab.
3. In the Accounting section, select Edit ✎.
4. Turn on the Close the books switch.
5. Enter a closing date. Note: You should not need to edit any transactions dated before this point.
6. Select your preferred security option from the dropdown menu:
   • Allow changes after viewing a warning: Users see a warning but can still make changes.
   • Allow changes after viewing a warning and entering a password: Users must enter a password to make changes. This is recommended for better security.
7. Select Save, then select Done.

Result: Your books are now closed. Any attempt to change transactions dated on or before the closing date will trigger the warning or password prompt you selected.

Year-end adjustments

Once your accounts are reviewed and reconciled, you can set the closing date in your settings.

When a new fiscal year begins, QuickBooks Online automatically transfers the net income from the previous year into the Retained Earnings account on the Balance Sheet.

This account reflects the total of your company's income and expenses from all previous years.

Note: The Retained Earnings account is not the same as the retained earnings line item shown on the Balance Sheet.

Related Links

• Edit your closed books
• Close your books in QuickBooks Desktop
• Use the year-end checklist for QuickBooks Online Accountant
• Review your clients' books