Starting a New Financial Year in QuickBooks

Once a year, many businesses start a new financial year for their accounting purposes. This can be done in two ways in QuickBooks:

1. Create a new QuickBooks company file for each new financial year (Less recommended when working with CommitCRM).

2. Close your books at year-end, but this information stays in the same QuickBooks company file (recommended!)

If you use the Commit-QuickBooks Link, it is preferable to use the second option (i.e. continue using the same company file) in order to keep the sync settings and avoid repeating the long process of linking all your QuickBooks Customers, Vendors and Items with their corresponding records in Commit (this is required when you start to use a completely new company file as described in option 1 above).

For your convenience, please find below some text copied from the QuickBooks Help file about closing your books at year-end. You should also read the 'QuickBooks Year-End Guide' for more information.

Important Note: When performing any year-end procedures, follow the instructions found in your QuickBooks documentation rather than the instructions below, since they may not suit your version/edition of QuickBooks.
You should also consult with your accountant.

You can choose whether to close your books at the end of the year or not. QuickBooks doesn't require you to do so.

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Restricted access: You can set a password to restrict access to data from the prior accounting period, including the details of every transaction. Transactions can't be changed without your knowledge. To modify or delete a transaction in a closed period, a user must know the closing date password and have the appropriate permissions.

•	Reporting: Any changes made after the closing date to transactions dated on or before the closing date will appear in the 'closing date exception report'.

•	Detail: You always have easy access to last year's data, including the details of every transaction.

•	Reporting: You can create comparative reports between this year and last year.

QuickBooks performs certain year-end adjustments, based on your fiscal year start month.

•	QuickBooks adjusts your income and expense accounts at year-end to zero them out. Therefore, you start your new fiscal year with a zero net income.

•	QuickBooks makes an adjusting entry to your net income. For example, if your profit for the year was $12,000, on the last day of your fiscal year the equity section of your Balance Sheet would show a line for net income of $12,000.

•	On the first day of the new fiscal year, QuickBooks increases your Retained Earnings equity account by the previous year's net income ($12,000 in this example) and decreases your net income by the same amount. This way, you start each new fiscal year with a net income of zero.