04 Mar Setting Your Closing Date
Too often, accountants receive file copies where the prior years financials, already turned into tax returns, have been altered. This is an expensive problem because often the accountant will need to do a trial balance reconciliation from the prior year that results in charging you more hours. Avoid inaccurate financials and disparities in your QuickBooks accounting data and tax returns by setting your closing date password.
The closing date password option can be found under the company options, or accountants menu if using an accountants copy of QuickBooks. Select set closing date. Then select the date you want to use. Then select a password. This password should be kept someplace safe, but can’t be reset by any admin user.
This password will be requested anytime you’re making a transaction that falls earlier than the closing date you selected in your set closing password date window.
When attempting to save transactions with dates earlier then your closing date a prompt box will appear requesting the password. This prompt should serve as a reminder that you are changing financial data beyond that date. In some cases, this is okay such as when you are updating estimates for adjusting purchase orders. In other cases, it changes data included on your financial statements or within tax returns and is not advised. Use the closing date password carefully.
Setting your closing date password each time you file sales tax or other monthly, quarterly, or annual tax filings is best practice. Alternatively the password can be set when financials have been produced for boards, committees or tax professionals after a reconciliation and month close procedure.
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