How do I close out end of year. (2024)

‎December 10, 201805:33 PM

I am new to Quick Books and have entered last years trail balance. Now I need to close out the year and can't find out where to do that

• QuickBooks Desktop

SkinnyRaven

Year-end adjustments QuickBooks makes automatically

QuickBooks performs certain year-end adjustments, based on your fiscal year start month.

• QuickBooks adjusts your income and expense accounts at year-end to zero them out. Therefore, you start your new fiscal year with a zero net income.

• QuickBooks makes an adjusting entry to your net income. For example, if your profit for the year was $12,000, on the last day of your fiscal year the equity section of your Balance Sheet would show a line for net income of $12,000.

• On the first day of the new fiscal year, QuickBooks increases your Retained Earnings equity account by the previous year's net income ($12,000 in this example) and decreases your net income by the same amount. This way, you start each new fiscal year with a net income of zero.

[Moderator Note]

For more information on taxes, forms, filings, payroll and other Year End activities, make sure to check out our Year End Resources page.

@ljohnstone790

You don't have to Finish 2018 work, to still enter 2019. You cannot run Payroll out of sequence, or Reconcile out of sequence. For instance, when the tax return is done, maybe not until April, you typically have a few 2018 entries to be made.

"Bank Files" are not carrying Your date; that is the date the Bank processed it, not your spending date.

Hi,

I hope this reaches you. I have the same question closing out the books at year end. I understand what you said that QB automatically makes year end adjustments and closing entries such as net income, however, if I generate the balance sheet at year end, equity section shows a separate amount of retained earnings and the net income for the year. I am wondering if there is a way to close out the books where in when you generate the balance sheet after closing, there would be no net income line, instead only retained earnings which is the yearend balance including the net income. I hope it makes sense.

Thanks

Hello, Wendie2018,

Thanks for visiting the Intuit Community!

Let me help share additional information about the Balance Sheet report at year end in QuickBooks Desktop.

The Balance sheet report shows a financial snapshot of your company as of a specific date. The report calculates how much your business is worth (your business's equity) by subtracting all the money your company owes (liabilities) from everything it owns (assets). The total for equity includes your company's net income for the fiscal year to date.

This is the reason it will always have a net income at the bottom of the report to total all the Income gained from the previous period.

To know more about the reports in QuickBooks Desktop, you can read this article: https://quickbooks.intuit.com/community/Help-Articles/Understand-reports/m-p/202665.

In case you need tips and related articles in the future about the "How Do I" steps in QuickBooks Desktop, visit our QuickBooks Community help website for reference: QBDT Self-help.

If you have any other questions concerning QuickBooks Desktop, please let me know. I'd be happy to answer it for you. Take care.

What about a balance owed on a loan to an employee? he has a balance of $1,000 but when Jan paycheck comes out, the loan balance says 0. How do I get the balance back so he knows what he still owes?

the Balance goes to 0 in paychecks, but I want the loan balance to continue into the next year.

Thanks for joining the conversation, @RKB7.

Having the option to add a field for the balance owed by an employee on a paycheck is currently unavailable. You can only view the total taken out from their checks using the YTD column.

Please see screenshots below for reference:

It’s indeed a great idea. Let me pass this along to the appropriate department and team members for consideration in the near future.

To ensure that the system won’t continue to withdraw funds after the full amount is paid off, I recommend setting up an item limit. Here’s how:

1. From the Lists menu, choose Payroll Item List.
2. Look for the loan item and open it.
3. Click Next until you reach the Default rate and limit window.
4. Enter the loan amount.
5. Once done, hit Finish.

Check out this article for more information: Edit a payroll item.

If you have any questions or clarifications, let me know by leaving a comment. I’m more than happy to help. Have a great day!

We do have a way where you can close the books to lock transactions for the pastperiods,DDriskell.

Closing your books is an important step to make sure that everything stays the way you want it to for the prior years. You can follow these steps on how to do it:

1. Go to Edit > Preferences > Accounting.
2. Select the Company Preferences tab.
3. Under Closing date, click the Set Date/Password button.
4. In the Set Closing Date and Password window, select the Closing Date.
5. Enter the Date Password, and confirm it.
6. Click OKonce done.

Here's a sample screenshot for a visual guide:

You can also check this article for more information: Close your books in QuickBooks Desktop.

Reach out to me if you need anything else. I'll be around to help you some more. Thanks.

Hello,

Do you know if there is away to change the target Retained Earnings account?

In our case we have created a new AAA account after a change in ownership and would like the Net Income to show up there.

Thanks for reaching out to us, EH67.

I'm here to share insights on how the Retained Earnings account works.

At the end of the year, QuickBooks automatically movethe money/prto Retained Earnings account via electronic swap. This account willshow the total of your company's income and expenses from all previous years. By default, we're unable to changes its target account.

If you need to show thenet income to your custom (AAA) account, you'll have to create a journal entry to move the balances. Take note that this process can be tricky if you're not familiar with accounting. You may need to consult your accountant to be guided in transferring the amounts.

In addition, here are some resources that you read to learnhow to prevent changes to past books in QuickBooks Desktop:

• Close your books
• Set or change a closing date and closing date password

Drop me a comment below if you need more help in managing your books and reports. I'd be more than happy to assist you again.

we recently changed from qb 2018 to qb online

how do i close the year 2020 ?

and can I enter for 2021 with out closing

Hello,jac88.

Thank you for choosing QuickBooks as your accounting software. Closing your books is super easy, though it's not necessarily as QuickBooks will automatically create adjustments in the coming year. Your program already puts the value from the Net Income as of the final date on the Balance Sheet and at the bottom of the Profit and Loss.

You can learn more information about closing your books in QBDT in this article:Close your books in QuickBooks Desktop.

If there's anything else I can help you with, please let me know. I'd be happy to help. Stay safe!

Hi,

I have run year-end closing on my online QuickBooks But Net income is not transferred to Retained Earning? What I should do now?

Hello, mahmood23.

Once you've closed your book, QuickBooks will automatically transfer Net Income to Retained Earnings. I'll share some steps to view the Retained Earnings.

Let's run a profit & loss report for this fiscal year. Take a look at the value of the Net Income at the bottom. Then, you can run the Balance Sheet for the same fiscal year. You'll see the Net Income is in the Equity. The value should be the same.

After that, change the Balance Sheet date to the first date of the new fiscal year. That's one day later than the P&L report. The Net Income will be gone, and it's now the Retained Earnings are holding that value.

Check out this article to learn more about Retained Earnings in QuickBooks Online:How to view Retained Earnings account details.

If you need assistance with any other banking-related tasks, you can review this resource to find helpful information and instructions:Find help with bank feeds and reconciling accounts.

If you have further questions about Retained Earnings, please let me know. I'm always here to assist you.

2. Select the Advanced tab.

3. Click the pencil icon in the Accounting section.

4. Toggle Close the books.

5. Enter a closing date.

Hi there, I have a unique situation (I think),

Let me set the stage here:

Canadian company

Company started Aug 2020 - YE is Dec 31.

US Parent Delaware Corp completed March 19, 2021.

YE Dec 31, 2021 still.

We may switch the structure back to a CAD parent co for 2023 but that is TBD (Access SRED funding)

We need a YE for March 18, 2021

But switch back to Dec 31 year-ends

From what I see, QBO can only choose a single year-end date and this historical year ends would change also?

What would be the best way to do this?

I think its probably best to keep Dec Year ends and do a manual Year end on March 18, 2021? This seems completely onerous.... but I don't see another solution.

Also in order to do this, do I need to setup an income summary account? I dont see something like that available in the chart of accounts.....

Thanks in advance!

Hi there AlphaInsights,

It's important that all your transactions be entered correctly for your books to be well balanced. QuickBooks Online is a great tool able to help you keep track of transactions so you can be able to see your financial reports. I can point you in the right direction for assistance.

As you said, if you do modify the year-end date, it can have an effect on the previous year ends. In order to know how you should be doing this manual year-end in the system, I recommend speaking with your accountant for guidance. They'll be able to help you make the best decisions for you to make this year-end so your books have correct totals. You can also find an accountant near you that has experience using QuickBooks by clicking on the Find a pro to help button located in that section.

If you have any other questions, feel free to reach out here.