• P. Seely

Year-End Tax Prep Tips For QuickBooks

Updated: May 5


Each year I reach out to my clients to provide them with a check list of items to help them prepare for taxes. Using QuickBooks makes some of these tasks very easy to do, even if you don't have an accounting background. Both desktop and online versions have tools that can make this a much simpler process. Although, I do recommend my readers still seek the guidance of professionals, like a ProAdvisor. This article should not be a substitute for seeking professional advice. Consider this article a guide when working with your bookkeeper or accountant. As the end of the year approaches, you and your accountant will need to complete certain tasks in QuickBooks Online or the Desktop to close out the old year and prepare for the new one.

A great resource is the QuickBooks Community website. The community is made up of millions of QuickBooks users and has thousands of articles that are informative and can provide users step-by-step instructions to help you get started on what can seem like a daunting task. The following sections can help guide you through these end-of-year tasks to make the ending of one year and the beginning of another easier.

  • Task 1: Confirm the first month of your fiscal year

  • ​It's important to ensure that the correct month is selected for the start of your fiscal year to allow QuickBooks to clear accounting ledgers behind the scenes while you work on other end-of-year activities.

  • ​To confirm or change the first month of your fiscal year:

  • ​Select My Company from the Company Menu

  • To check the fiscal year setting, select the pencil icon, then Report Information

  • Make sure the first month of your fiscal year is correct so your financial reports use the correct dates

  • Your fiscal year is confirmed

  • Task 2: Confirm customer account balances, send statements, and clear any outstanding deposits

  • ​At the end of the year, it's a good idea to ensure your customers have up to date balances and that billing and payments are all up to date.

  • Once you've identified outstanding balances, you can send statements to the customers. For more information about creating billing statements

  • You should also confirm that all deposits are cleared from the deposit queue. Any funds sitting in this queue will not be included in your current year's income.

  • Task 3: Confirm vendor/ vendor account balances and pay bills or write checks

  • ​The end of the year is a good time to take care of any outstanding bills you owe for the year, and address any outstanding credits, discounts, or products you're owed from your vendors.

  • Task 4: Reconcile bank accounts, credit cards, and petty cash

  • ​It's a good practice to match your QuickBooks data to your bank and credit card accounts to ensure that all transactions have been recorded correctly, and that your year-end reports display accurate financial data.

  • Accurate financial data is the hallmark of all successful businesses

  • For more information about the reconcile process, see reconciling an account or the Desktop Reconcile Hub.

  • Task 5: Invite your accountant - it's time to collaborate and consult

  • ​Your accountant has the expertise necessary to give you suggestion on data input, help with your year-end process, and forecast your company's financial future.

  • A ProAdvisor is a QuickBooks-certified independent accounting pro who can provide strategic insights to drive small business success

  • Task 6: Run year-end reports

  • ​It's important to run year-end reports to review the information and identify any issues or discrepancies

  • ​You and your accountant can review the information in these reports to identify any potential issues to resolve. It is also important to understand how QuickBooks makes automatic adjustments at year's end, in preparation for the upcoming year.

  • Task 7: Distribute profits from the business (accountant)

  • ​If your Retained Earnings need to be divided among owners or partners, your accountant can assist you.

  • ​It's good practice to have previously set up an Owner's Equity and Draws ledger for any payments or withdrawals from the company during the year by the key people who founded the company.

  • Task 8: Prepare year-end tax return (with accountant assistance)

  • ​Taxes are normally prepared by a company's accountant

  • QuickBooks Desktop users should send your accountant an Accountant's Copy file, you give the accountant access to all the financial information they need to prepare and file taxes on your company's behalf, and to make any necessary changes.

  • Task 9: Close the books (optional)

  • ​QuickBooks Desktop or Online does not require you to close the books as part of the Year-End. However, it does offer the use of a closing date password to limit access to the closed accounting period.

  • For more information setting the password, see Set, change or remove closing date and closing date password.

For more information on Year-End regarding Payroll, view the Following:

The information contained in the Intuit QuickBooks Payroll Year-End Center provides general information about the payroll process. It's not intended to provide tax or legal advice. Always consult your tax professional when preparing tax documents.

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© 2016 by Philip Seely. NMLS# 1985405. All rights reserved.