QuickBooks Tip: Set a Closing Date Password to Protect Prior Year Data

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:

1. Go to “Company”
2. Select “Set Closing Date”
3. Select “Set Date/Password”
4. 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.