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  #1  
Old 09-22-2008, 08:03 AM
donnaann donnaann is offline
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Month End Closings

Hi All!

I have QB Pro 2008. How would I do month end closings on QB. Is there an option for this? I am new at this, and not quite sure how to do this.

Thanks!
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  #2  
Old 09-22-2008, 09:53 AM
suzannemead suzannemead is offline
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Normally you don't have to do anything as the program does what it needs. If you have special circumstances that require month end accruals or adjustments then you may need to enter them manually.
The program is designed and is based on reports. You can create reports for any time period of your choice and it has preset time periods like, This Month, Last Month, This Year, etc. Quickbooks will close out the income and expense accounts at the end of the year into Retained Earnings.
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  #3  
Old 09-22-2008, 02:28 PM
donnaann donnaann is offline
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Oh, sounds good. So, there really is nothing that needs to be done except for the circumstances you mentioned. Is there an "at a glance" report I can view to see that the month end books have been closed?
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  #4  
Old 09-22-2008, 03:43 PM
suzannemead suzannemead is offline
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Well, if you do a P&L for a month, and then do one for the following month that is just starting you will see that the numbers did not carry over. I'm not sure what you want to see or what you are thinking when you say "closed". Like i said, Quickbooks is report driven. You can create reports for any time frame and get the numbers to date, except after the end of a year. The Income and expense accounts start over each new year.
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  #5  
Old 09-22-2008, 04:50 PM
EdStockton EdStockton is offline
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Month end close

You are apparently used to Peachtree or some other program that restricts the period into which you can enter transactions. QuickBooks never closes any period. I have clients that have live data back to the early 90's. This is one of the great benefits of QuickBooks. Nothing ever closes. QuickBooks is date driven.

This can also be a real problem. When I audited people who used QB, I used to require them to set a password for closed peiods that only I knew. One can get around this but they did not know how to.

One of the things people often want to "close" is because in most software you have to perform certian bank reconciliations before you can proceed to the next month. Other issues are that in most programs you can make entries to Accounts Receivable and Payable that are not associated with a customer or vendor. Therefore, the aged listing does not agree with the general ledger balance. Those issues do not exist in QB because of the way transactions must be entered in QB.
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  #6  
Old 09-23-2008, 03:36 AM
RobJoy RobJoy is offline
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As EdStockton says, QB's great virtue of never closing periods can also be its great vice. QB will let you correct previous periods 'properly' - hooray! - it will also let you inadvertently mess them up.

Here's how to be a very disciplined bookkeeper and impress the bejesus out of your accountant:

Make yourself a checklist (Excel maybe?) of things you (and your accountant) need to be done for each month end: bank, petty cash and credit card reconciliations, print and review customer statements, reconcile prepayments and accruals, reconcile inventory valuation summary to balance sheet inventory account, reconcile merchant credit card statement to QB's merchant account etc. Physically tick them off on a printed checklist, and maybe add printed (or exported to Excel) reports to a 'Month End 2008 August' file/folder. Once it's all done, set the closing date for the file as 31st August 2008, so that you can't accidentally add or amend something. You still can correct old stuff, and you should - certainly in the current fiscal year - but it will be under control by a human, where it belongs, not some crabby accounting package like Sage or Peachtree.
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  #7  
Old 09-23-2008, 11:08 AM
donnaann donnaann is offline
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Thank you so much, guys! Wow! This has given me a much better picture on so-called month end closings.

I guess my question really was...how do you do a month end closing? I have never seen instructions in the accounting books. The reason being, I guess, is that you really don't technically close out at "month end" only year end, right?

So I think the point you are trying make (and am I correct) here is to just make sure everything is checked, reconciled, etc. each month, which I do anyway! This doesn't take very long since everything I do is in QB.
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Old 09-23-2008, 12:13 PM
EdStockton EdStockton is offline
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Month end close

That is correct. There is really no month end closing procedures. Actually, there is no year end procedures either. Just be sure to reconcile your bank accounts, your credit card accounts, etc., and run the aging reports for accounts receivable and accounts payable and check their balance against the balance in the general ledger, and run an inventory report and check that against the general ledger balance for the inventory account. Also, you may want to employ the fixed asset list and check those balances against the general ledger balances.
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  #9  
Old 09-23-2008, 01:05 PM
donnaann donnaann is offline
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Talking

Thank you very much Ed, and everyone. You were all a tremendous help.
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Old 09-24-2008, 03:13 AM
Joe Williams Joe Williams is offline
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One thing to add to Ed's year ent process. Hake a backup of the file after you have verified the file is correct. It should also match the data used for income taxes. Keep a copy of the backup in the office and some other safe place. This way you can prove that nothing has changed in the file incase of an audit!!
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  #11  
Old 09-24-2008, 07:58 AM
donnaann donnaann is offline
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Joe, Great idea, and thank you. This is very good advice for a beginner accountant, like me.

I actually have another question concerning QB. I went for an interview last night and they explained to me that the girl they have now messed up QB very, very bad. She has been putting all the wrong postings in the wrong accounts, and various other things (I don't know exactly what the "other things" are and to what capacity) she has messed up.

Question: It sounds like a real mess. Is there any particular way to "clean up" such a case in QB, or is it just a matter of many adjusting entries, and going back into the history of each account fromt he beginning?
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Old 09-24-2008, 08:17 AM
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lisa_mn lisa_mn is offline
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Quote:
Originally Posted by RobJoy View Post
. You still can correct old stuff, and you should - certainly in the current fiscal year - but it will be under control by a human, where it belongs, not some crabby accounting package like Sage or Peachtree.
Peachtree isn't crabby - just poorly trained users are!

It's just as easy to go back and fix things in Peachtree as it is in QB. Numbers are only truly "locked down" when a fiscal year is closed, as it should be. (even then, there is a way to change closed years).
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  #13  
Old 08-28-2013, 10:27 PM
Gepi Gepi is offline
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Closing QB database on a month - basis is, excuse me, but the stupidest thing that can ever be.
First of all, it pours all results into retained earning, automatically on a monthly basis and you seal this by your own action. No return.
As people have already said, there is no close.
What does close mean anyways? This is a live database.
Once you receive old invoice, what, you are going to post it under a different period?
The point is you cannot prevent past actions from impacting on current results, this is a feature of life and cannot be disregarded just by entering a password.
And the password, it is really not sealing anything. The purpose of this month lock is when you have a bookkeeper who posts bills and prepares invoices, and an outside accountant who does all the rest, and who does not want the bookkeeper to inadvertently change something.
Month-end closing procedures are thing of the past, when accountants used to "close" the period recognizing gain/loss on a monthly basis.
So whoever tells you that past period is locked, either he/she is not too comfy with accounting and not too privy to Quickbooks features, or you are at a level of a secretary, basically.
Initially, the lock feature in Quickbooks database is intended for periods completed long ago, for instance, in March when you have already filed your tax return, have received all pending bills and have resolved all accounting matters related to the previous year.
Excuse me, but monthly accounting period is simply ridiculous concept that contradicts with most basic accounting principles.
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Old 08-29-2013, 03:49 AM
RobJoy RobJoy is offline
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The answers I, and others gave, make it quite clear that we do understand perfectly well that QB does not Close periods.

We are, however, living in a world where people want monthly management accounts, usually by a deadline, and quite often do not have much understanding of bookkeeping at all, let alone QuickBooks. In an environment where the bookkeeper is required to stand by the figures they give management, it is prudent to establish a monthly routine so that, as far as possible, a month is finished with and reliable.

Quote:
First of all, it pours all results into retained earning, automatically on a monthly basis and you seal this by your own action. No return.
Well, no, that's quite wrong. QB never seals the past - with certain caveats in the case of VAT. There is no Close procedure, QB does not retain balances in any accounts, the balance shown in Retained Earnings only depends on the year end date. I'm not sure if it's possible in the current version (I hope so), but in the past I have changed the accounting year end and instantly seen the changed Retained Earnings.

The purpose of the password-protected date lock, so far as I'm concerned, is to guard against accidentally dating something in the past, or amending a past transaction without remembering that you probably need to report that period again. If it's a past financial year already reported, then in practical terms the books have to be regarded as closed, so it serves as a warning that the adjustment will have to be dated this year and identified as a past period adjustment.

The monthly accounting period is not a ridiculous concept, but is mostly to do with management accounting, rather than statutory reporting. How do you suggest business owners should monitor progress if they don't follow what's happening over some convenient period? Many charges happen on a monthly basis, it's a time frame that suits most people, so a month is still seen as a sensible time unit to measure performance.

The checks and reconciliations I suggested are those which any bookkeeper should do, and most of us find that once is month is about right.
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  #15  
Old 08-30-2013, 12:09 AM
Gepi Gepi is offline
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You summed it up so good there
"quite often do not have much understanding of bookkeeping at all, let alone QuickBooks"
but in the rest, you just prove totally the opposite contradicting logic.
It is not ridiculous?
Well, tell me this - how do you account dates on credit card statement, quoting bills that are in past, already sealed month? If you password protect your previous month, you cannot post to it anything.
How do you post the bills per the CC statement that contains bills from past transactions? How do you reflect a invoice revision for which your vendor does not give you debit or credit note? How do prevent live events related to postings from past period and not reflect this into that period? If you understand that you overpaid a client in June, discovered this in July and your interest is accrued in August how exactly do you disclose that in already sealed periods? And besides, why seal it since you can anyways change the AP amounts from the AP register. You think QB left that option open just by overlooking it? Come on. Not everything is that simple as just one accountant's accounting experience.
Per any GAAP accounting periods are chosen by the company. How do you justify monthly accounting period in comparison to annual? Management wanting ??? REally???
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