Quickbooks allows users to “close” periods so that transaction data cannot be altered or otherwise changed. Once you’ve finished your books for the year, for instance, you may want to close it off. This ensures all of your data remains intact in case you need to refer back to it. But what if there’s a check in a closed period that you still need to void?
As explained by Intuit, voiding a check in a closed period prompts a warning that it could affect reports from the prior period. Of course, this shouldn’t come as a surprise given the fact that closed periods are intended to prevent inaccuracies while preserving a business’s books for the said period.
If you void a check that was tied to an expense account, Quickbooks will automatically create a journal entry to prevent bookkeeping problems later down the road. This is certainly helpful. Unfortunately, though, it’s often not enough to prevent inaccuracies created from voided checks in a closed period.
So, what if you need to a void a check that’s connected to an expense account? In this case, Quickbooks will automatically create two separate journal entries to preserve your books. The first journal is actually a duplicate of the accounting entry found on the check, while the second journal entry is a “reversing” entry with a current date that reverses the accounting information on the check.
Keep in mind that when you void a check, you’ll have the option to override the automatic creation of these journal entries. Quickbooks will display a message, asking if you would like to create the aforementioned journal entries. Simply choose the “No, just void the check” option to bypass these journal entries. If you tell Quickbooks NOT to create them, however, you may find yourself struggling to balance your account for the closed period later down the road. This is why it’s generally a good idea to go ahead and allow Quickbooks to create the two journal entries.
Also, when voiding a check that’s connected to a separate, non-expense account, Quickbooks may notify you, telling you that the voided check could affect your financial reports. This includes checks connected to items, bill payments, paychecks, payroll and sales tax.
The bottom line is that you need to use caution when making any changes on a closed period. Even small changes could affect your bookkeeping. So if you void a check in a closed period, it’s best to allow Quickbooks to create the journal entries.
Did this tutorial work for you? Let us know in the comments section below!