Have you ever mistakenly misdated a transaction in QuickBooks? Has your auditor ever asked you why equity did not match the prior year’s audited financial statements? Since QuickBooks does not require you to close your books after year-end, changing, adding, or deleting entries made in a prior fiscal year is a common mistake. So you ask, “How can we avoid that?”
Many accountants using QuickBooks don’t know that there is a function to set a closing date and still be able to view the closed data. This function will restrict and protect the data prior to that closing date by use of a unique closing date password. Anytime a user attempts to make a change in the close periods, a prompt will appear for a password prior to saving the entry. Therefore, no entry can be made during that period without your permission or knowledge. Implementing the use of this function is very simple and it can help avoid numerous errors.
For information on how to close and lock a period in QuickBooks click here.
By Cailee Arnold