What Is the Closing Date and How Do I Set It?

The Closing Date can be used to protect data from careless modification by making it more difficult – but not impossible – for you to change or delete transactions on or before the closing date.  Unlike other accounting systems that require you to close your books and make it impossible to add, change, or delete transactions in closed periods, QuickBooks offers the flexibility for you to restrict access to periods you or your accountant have determined are closed and to later remove that access restriction, a process commonly called “re-opening your books.”

It’s important to understand that setting a Closing Date doesn’t result in recording any transactions; The Closing Date is only an access restriction.  You can control how strict that restriction is by whether you set a Closing Date Password. If you decide to set a password, QuickBooks requires the password to save any changes that would alter balances for the accounting period you have closed. This includes adding, editing, or deleting transactions dated on or before the closing date.

Note:  You can set or change the password at any time.  Also, if you lost or forgot the closing date password, then you can remove the password.  But, to perform these functions, you must be logged into the QuickBooks Company File as the ADMIN user.

To set, change, or remove a closing date and closing date password:

1. From the Edit menu, select Preferences.

2. Click Accounting and then the Company Preferences tab.

3. In the Closing Date section, click the Set Date/Password button.

4. In the Date section, select the date through which you want your books

to be closed. Typical closing dates are the end of the prior month, quarter, or year. Discuss this with your accountant for specific guidance.

5. (Optional) If you want to exclude non-posting transactions from closing

date restrictions, select Exclude estimates, sales orders and purchase

orders from closing date restrictions.

6. (Optional, but recommended) Enter a password in both the Password

and Confirm Password fields to limit access to the closed accounting

period.  If you forgot the closing date password, just remove it from

this step in the password screen and the confirm password screen, but

this only works if you are logged in as admin.

7. Click OK.

Recording a Transaction after Setting a Closing Date: If you attempt to enter any transaction with a date on or before the Closing Date, QuickBooks will display either a warning or a confirmation window, depending on whether you set a Closing Date Password.  If you set a Closing Date Password, you’ll have to first correctly enter it to record the transaction.

The warning below shows what you’ll see when attempting to record a transaction dated on or before the Closing Date if you do not enter a Closing Date Password. You’ll still be able to record the transaction by clicking Yes.  The access restriction is simply forcing an extra step.

The warning below is the stricter limitation you’ll see when attempting to record a transaction dated on or before the Closing Date if you do enter a password. You’ll have to correctly enter the password to record the transaction, so the access restriction is greater.

Note: Since only the QuickBooks Administrator or a user with External Accountant privileges can set QuickBooks preferences, it is not possible for users without those higher privileges to first remove the Closing Date or change the Closing Date Password to bypass the access restriction.  This insures that Closing Date restrictions are effective.