# Close your books in QuickBooks Online

##### by Intuit•3460• Updated 1 month ago

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**](https://community.intuit.com/oicms/L66POfRrI_US_en_US).
2. Review all accounts for completeness and accuracy.
3. Enter any outstanding invoices, expenses, and payments.
4. [**Reconcile your accounts**](https://community.intuit.com/oicms/L3XzsllsK_US_en_US) 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.