QuickBooks Tip: Set a Closing Date Password to Protect Prior Year Data
Read
It is that time of year again: time to reconcile your bank accounts and review your QuickBooks file, before sending it off to your accountant for year-end closing.
The file you send is going to be the basis for your tax return and/or financial statements, so it is critical that the QuickBooks file remain unchanged once it is sent to your accountant. QuickBooks has a built-in safeguard to prevent users from accidently changing closed periods – a closing date password.
Consider setting a closing date password when you send your QuickBooks file to your accountant. It will help ensure that no one inadvertently makes a change that affects a closed period. In fact, this step is so important, Intuit has made it very easy for users to perform.
Here’s how to set a closing date password in QuickBooks:
- Go to “Company”
- Select “Set Closing Date”
- Select “Set Date/Password”
- Choose your closing date and password and click “OK”
Each time you set the closing date, any period prior to that date will be password protected from changes. Anyone trying to make a change to a closed period will have to enter the password to save the transaction in QuickBooks. We recommend, at a minimum, setting a closing date at year-end, however you may consider setting interim closing dates to prevent unintentional changes to reconciled periods throughout the year.
Contact Kaufman, Rossin’s QuickBooks ProAdvisors to learn more about protecting your prior year data.
Terri Richards, CPA, is a Entrepreneurial Services Principal at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.
Hi there, For some reason, even when I lock a closed period, we can still make changes. It will provide a warning message but it will still let you change a locked period.
Hello Tracy. You can make changes to a locked period, but only after entering the password. Please follow the directions below to set up your closing date password in QuickBooks:
Go to “Company”
Select “Set Closing Date”
Select “Set Date/Password”
Choose your closing date and password and click “OK”
We hope this helps!
I have two periods in QuickBooks that have not been closed. My question is can I give the same closing date to the two periods that have not been closed?
Hello! Great question. Yes, you can do this. But you need to use the date for the end of the second period. i.e. if it’s October and November, you would use 11/30 as the closing date. Hope this helps!
Can time for work performed during a closed period be entered after the closing date? This would be work to be invoiced at a later date.
I have forgotten my year closing password. How can I recover that password?
If you log in as administrator, you should be able to remove or change the password. Go to Company, Set Closing Date, click on Set Date/Password. I hope this helps!
Thank you for your question. You can record payments into a closed period by entering your closing date password when prompted, however, I recommend communicating with your accountant to make sure this is the choice you want to make. Payments should be recorded in the period they are received. If you have any questions, please do not hesitate to contact us.
When we close the previous year, we cannot enter payments on open sales orders or Invoices. Is there a way to enter payments on a closed period?
Hi Mam, I have a question, I am using qb for a non profit org, can I use the Create sales for income for the organization and then write checks for expenses ?
Please let me know.
Thank You,
Sunil