Monthly Book Closing Guide for QuickBooks Online
Follow these steps to ensure your books are accurately closed each month in QuickBooks Online.
1. Reconcile Bank Accounts in QBO:
Go to 'Accounting' > 'Reconcile'. Select each bank account and match transactions, ensuring the ending balance in QBO matches your bank statement. Resolve any discrepancies.
2. Reconcile Credit Card Accounts in QBO:
Navigate to 'Accounting' > 'Reconcile'. Select each credit card account and reconcile it against the statement, matching transactions and verifying balances.
3. Process Payroll (if using QBO Payroll):
Ensure all payroll for the month has been run and recorded correctly in QuickBooks Online Payroll. Verify tax liabilities and payments.
4. Record Depreciation and Amortization (Journal Entries):
Create manual journal entries in QBO ('+ New' > 'Journal Entry') to record the monthly depreciation of fixed assets and amortization of intangible assets.
5. Accrue Expenses (Journal Entries):
Post journal entries in QBO for any expenses incurred but not yet billed or paid by month-end (e.g., estimated utility bills, interest payable).
6. Adjust Inventory in QBO (if applicable):
If you track inventory in QBO, perform any necessary inventory adjustments for shrinkage or obsolescence ('+ New' > 'Inventory Quantity Adjustment'). Review Cost of Goods Sold.
7. Review Accounts Receivable and Payable Reports:
Run the 'Accounts Receivable Aging Summary' and 'Accounts Payable Aging Summary' reports in QBO ('Reports' > 'Who owes you' / 'What you owe'). Ensure accuracy and follow up on overdue invoices.
8. Generate Financial Statements in QBO:
Access 'Reports' in QBO to generate your 'Profit and Loss' (Income Statement) and 'Balance Sheet' reports for the month.
9. Review for Errors and Anomalies:
Carefully review the generated financial statements and the 'Audit Log' in QBO ('Gear icon' > 'Audit Log') for any unusual entries, large variances, or errors.
10. Close the Period in QBO:
Once all adjustments are made and statements are finalized, set a closing date in QBO to prevent accidental changes to the past month ('Gear icon' > 'Account and settings' > 'Advanced' > 'Accounting' > 'Close the books').
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