It’s a good idea to close a fiscal period once you’ve conducted all of the transactions for that period. While there’s no rule requiring it, doing so will reduce the risk of changes that could otherwise throw off your books. If a business owner leaves a period open for instance, his or her company’s accountant may go back and make changes to it without their knowledge. And if these changes are incorrect, it will throw off the business owner’s books. This is why it’s recommended that you lock periods once you are finished with them.
Assuming you use Intuit’s Quickbooks accounting software, you can easily lock periods. It’s a simple and effective way to prevent other users from making changes to that period. Furthermore, you can set a password for the respective period, allowing you or other authorized users with the password to still make changes. For a step-by-step walkthrough on how to lock a period in Quickbooks, keep reading.
To lock a period in Quickbooks, log in to your account and click the Gear icon, followed by “Company Settings.” Next, choose “Account and Settings.” From there, you can click “Accounting,” after which you should place a check next to the “Close the books” box. Quickbooks will then allow you to specify the closing date. Of course, you should double check this information to ensure it’s correct. If you close the wrong date, you won’t be able to make changes to that date without a password (if you set one).
Next, choose whether to set a password. Again, if you set a password, you or someone else can go back and make changes to the locked period. You simply need to enter the password. If you don’t specify a password, you won’t be able to make changes to transactions within that period. Ultimately, it’s up to you whether or not you want to use a password. Some business owners and accountants prefer it, whereas others don’t. If you choose to use a password, store it in a safe and secure location for future reference.
After specifying whether or not you want to use a password, click “Save,” followed by “Done.” Sorry if you were expecting more, but that’s all it takes to lock a period in Quickbooks!
Did this tutorial work for you? Let us know in the comments section below!