One of the biggest problems that I see with my QuickBooks clients is that they incorrectly post current transactions in a prior period. This accounting system is very date sensitive, so it is important to get the date right.
To prevent yourself or anyone with access to your Company from accidentally posting to prior periods you should set a closing date.
To do this, go to preferences (Edit -> Preferences) and on the left side of the dialog box select “Accounting”. Now, select the “Company Preferences” tab and enter a closing date. In most cases this should be 12/31/2004.
The benefits of this will be twofold. First, it will limit posting errors…making your reports more accurate. Second, it will save you money when it comes time to prepare your taxes. Every year I am brought files where retained earnings is out of balance and I can spend literally hours correcting what could have been prevented by this simple step.
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