The end of the financial year has happened and personal tax returns (that means all Sole Traders as well), need to be submitted by the 31 October. That means that: you/your bookkeeper/staff and your accountant will need to complete certain tasks in QuickBooks Online to close out the old year and prepare for the new one.
The following sections from the Intuit Quickbooks Pro Advisor Help Site, will help guide you through these year-end tasks to make the ending of one year and the beginning of another a lot easier.
It's important to ensure that the correct month is selected for the start of your financial year to allow QuickBooks Online to clear accounting ledgers behind the scenes while you work on other year-end activities.
To confirm or change the first month of your financial year:
Go to Settings ⚙.Select Account and Settings.Select Advanced.In the Accounting section, verify that the setting in the First month of financial year field is correct, or select the pencil ✎ icon to change the setting.Select Save.Select Done.
Your financial year is confirmed.
At the end of the year, it's a good idea to ensure your client base has up to date account balances and that billing and payments are all up to date.
To check customer account balances:
Select Reports.In the search bar, enter Accounts Receivable Ageing Summary or Accounts Receivable Ageing Detail and select the report you want to review. These reports are available in QuickBooks Online Essentials and Plus only.Review the report to identify customers with outstanding balances.
Once you identify outstanding balances, you can send statements to the customers.
To send a statement:
Select Sales, then select Customers.Locate the customer you want to send a statement to.From the Action column drop-down menu, select Create statement.In the Create Statements window, select Print and Preview to print the statement, or select Save and send to create and preview an email to send with the statement to the customer.
Here's some more information about creating statements.
You should also confirm that all deposits are cleared from the deposit queue. Any funds sitting in this queue will not be included in your current year's income.
Here's how you create a bank deposit.
The end of the year is a good time to take care of any outstanding bills you owe for the year, and address any outstanding credits, discounts, or products you're owed from your suppliers.
To review outstanding bills:
Select Reports.On the search bar, enter Accounts Payable Ageing Summary or Accounts Payable Ageing Detail and select the report you want to review. These reports are available in QuickBooks Online Essentials and Plus only.Review the report to identify any outstanding bills to pay before the end of the year.
Once you identify any outstanding bills, you can clear them up before the end of the year.
It is good practice to match your QuickBooks Online data to your bank and credit card accounts to ensure that all transactions have been recorded correctly, and that your year-end reports display accurate financial data.
To reconcile your accounts:
Go to Settings ⚙️.Select Reconcile.Follow the prompts to match the transactions on your bank or credit card statement with the transactions on the Reconcile page.
For more detailed information about reconciling, see How to reconcile accounts or Year-end: Reconcile accounts for the entire year
Your accountant has the expertise necessary to give you suggestions on data input, help with your year-end process, and forecast your company’s financial future.
If you haven't already done so, QuickBooks Online makes it easy to invite your accountant to collaborate with you, and to give them access to your QuickBooks Online account.
Once your accountant accepts the invitation, they have access to your accounts.
It's important to run year-end reports to review the information and identify any issues or discrepancies.
To run year-end reports:
Go to Reports.Locate and review the Profit and Loss report and the Balance Sheet, as well as any customised reports you or your accountant require.Make sure that the Profit for the Year figure matches the balance on the Profit and Loss report.
You and your accountant can review the information in these reports to identify any potential issues to resolve.
Your accountant can review a more detailed view of how transactions or journals will affect the Profit and Loss or Balance Sheet depending on the account types, and can make changes to any item for appropriate display on reports.
To review detailed information:
Ask your accountant to sign in to their account.Under Accountant Tools (the envelope icon), select Reclassify Transactions.
Your accountant can either change the Account that the transaction is in or the class that the transaction is attributed to.
If your Retained Earnings need to be divided among owners or partners, your accountant can assist you.
It's good practice to have previously set up an Owner's Equity and Draws ledger for any payments or withdrawals from the company during the year by the key people who founded the company.
To create journal entries:
Select the Plus sign (+) on the Toolbar.Select Journal Entry.
For detailed information about journal entries, see How to create a journal entry
Taxes are typically prepared by a company's accountant.
When you send your accountant an invitation to your QuickBooks Online account, you give the accountant access to all the financial information they need to prepare and file taxes on your company's behalf, and to make any necessary changes.
Your accountant can use this information to prepare, or help you to prepare, any required year-end tax return.
Closing the books lets you control changes to transactions dated before the end of the financial year.
Select Settings ⚙️.Select Account and Settings.Select Advanced.In the Accounting section, select the pencil (edit) icon to open the fields for editing.Select the Close the books checkbox.Enter a Closing Date and select a warning preference. You can also optionally enter and confirm a password that anyone who tries to make changes must enter.Select Save.Select Done.
For detailed steps to guide you through closing your books, see How to close the books
Close your books to lock past transactions
Learn how to close your books in QuickBooks Online.
Closing your books means locking everything entered before the closing date. This is an important step to ensuring everything stays the way you want it to. Closing your books prevents any accidental changes that could affect your reports. Here's how to close your books.
Close your books
Before you start
Sign in to QuickBooks Online as a master admin or company admin.Review your books and make sure everything looks good. Here are a few things you can review:Enter any outstanding invoices, expenses, and payments.Reconcile your accounts up to your closing date.
Close your books
Go to Settings ⚙ and then select Accounts and Settings.Select the Advanced tab.Select Edit ✎ in the Accounting section.Select the Close the books checkbox.Enter a closing date. Give yourself a comfortable deadline. You shouldn't need to edit any transactions before this date. Your new bookkeeping work will start after this point.Select the Allow changes after viewing a warning and entering a password option from the drop-down menu if you want to require a password before editing your closed books.Select Save and then Done.
Please do not hesitate to get in touch if you have any problems with all those steps... we are certainly cheaper than an accountant and will never advise on anything we are not supposed to as registered bookkeepers.
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