Ask the Accountant…
Question: I am using an industry software for my orders and accounting, but the end of the year is very detailed and time consuming. Is the year-end for QuickBooks easier?
Answer: QuickBooks has a simple year-end process for both QB Desktop and QB Online. At the end of your fiscal year (typically, but not always, December 31), the income and expense accounts are automatically closed into the Net Income on the Balance Sheet, leaving the income and expense balances at 0 to start a new year.
The distributor/owner’s role in this process is to record all cash inflows and outflows through the year-end (bank and credit card transactions) and reconcile these accounts with their corresponding statements.
And then, may I suggest, wait until after reconciling January, or the first month of your new fiscal year, to allow for trailing entries and adjustments your accountant might make like depreciation or loan adjustments.
Please email accounting questions you would like considered for the column to [email protected] with the subject line of “Ask the Accountant”.
