QuickBooks makes some automatic adjustments to your books at year-end, and even though you don't have to close your books you can still protect that data. In QuickBooks version 5.0, you can protect last year's transactions from accidental change by using a transaction password. In QuickBooks version 6.0 and later, there is a new password/permissions system that is also used to protect last year's transactions. Advantages to not closing your books:

• 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. Additional Notes
• For additional information on year-end tasks, check the index of the onscreen Help and the User's Guide for periodic tasks.
• For depreciation of fixed asset instructions, check the index of the on-screen Help and the User's Guide for depreciation.
• For adjustments that transfer money from one income or expense account to another, check the index of the on-screen Help and the User's Guide for general journal, entries.
• For transaction passwords, check the index of the on-screen Help and the User's Guide for passwords, closing books or period, or passwords, transactions.
• For yearly tax forms, check the index of your on-screen Help and the Users Guide for tax forms

QuickBooks performs certain year-end adjustments, based on the fiscal year start month you entered in the Company Info window under the File menu.

• QuickBooks for Windows automatically 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 for Windows makes an adjusting entry with your net income. It posts it to the Retained Earnings account, which QuickBooks creates automatically.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.

Option 1: Condense transactions as of a specific date

This option removes closed transactions dated on or before the specified date and enters monthly summary journal entries for them. Transactions dated after the specified date are retained as are open transactions dated on or before the specified date.

You can improve the effectiveness of condensing by selecting additional transactions to be removed, such as unreconciled bank transactions or invoices that have been marked "To be sent."

After Condense removes transactions, you may be left with list items that are no longer used, such as unused accounts, unused vendors, or To Do Notes that have been marked "Done." You can instruct QuickBooks to remove these items as well.

Option 2: Remove all transactions

This option removes all transactions from your company file. Your lists, preferences, and service subscriptions will be retained. Use this option if you wish to start a new company file without re-entering names and items. (Not available if using payroll or online banking features.)

Backing up: Regardless of which option you choose, the Archive & Condense Wizard will prompt you to make a backup of your company data file before condensing.

I. QuickBooks enables you to start a new company file each year, eliminating the data entry required the first time you set up a file. Please be aware of the following limitations:

II. Prior to starting a new company file, create and print the following reports dated December 31st of last year:

III. To start a new company file:

Your new company file retains your lists, preferences, and service subscriptions, but no transactions. You may begin entering opening balances for Balance Sheet accounts by choosing Make Journal Entry from the Company menu.

To rebuild the outstanding balances in Accounts Receivable, you can either create "balance forward" invoices for a lump sum customer balance, or you can recreate individual invoices.
The Enter Bills option in the Vendors menu enables you to recreate vendor balances, charging these bills directly to the Opening Balance Equity account, as opposed to individual expense accounts.

You can make transfers to the Retained Earnings account from the registers of other balance sheet accounts; or you can use Retained Earnings in a general journal entry. Your accountant can advise you if adjustments to this account are appropriate.

While you might adjust the Retained Earnings account to track funds withdrawn by, or distributed to, company owners, Intuit recommends that you create a separate equity account for these transactions. Such accounts are commonly called Owner's Draw. With this method, you know at a glance the total funds withdrawn by the owner as well as the individual transactions that make up the total amount.

To adjust Retained Earnings from the register of another balance sheet account:

1. Open the register of the balance sheet account.
2. Enter an increase or decrease amount with appropriate notes.
3. Type Retained Earnings in the Account field, and save the transaction.

1. From the Company menu, select Make Journal Entry.
2. Debit or credit Retained Earnings and other appropriate accounts.
3. Save the transaction.

1. Choose an existing equity account or set up a new equity account, e.g. Owner's Draw, to track owner's draw transactions.
2. Write out a check to the owner and use the above account in the Account field.
3. To view entered transactions, open the register of the account chosen in step 1 from the Chart of Accounts.

To designate an administrator:
Decide who the administrator will be. Choose someone who is usually available in your office.

1. From the Company menu, choose Set Up Users.
2. In the user list, select Admin and then click Edit User.
3. Enter the name of the person who will be the Admin.
4. (Optional) Enter a password in the Administrator's Password field. Enter the password again in the Confirm Password field.
5. Click Next and then click Finish.

To set the Owner's password:

1. To assign a password to a new user
   From the Company menu, choose Set Up Users.
2. Click Add User.
3. In the User Name field, enter the person who is to receive the password.
4. Enter the password: first in the Password field and then in the Confirm Password field.
5. Click Next.
6. To set up access permissions for this person, follow the instructions that appear.