A year end close checklist for QuickBooks Online client files

If December recon is not done, stop. Do not set a closing date on a file that still has an unreconciled card. The monthly board already has chase, feeds, rules, receipts, recon, recurring entries, AR, AP, accruals, payroll tie out, the pack, and lock. Year end adds the items that do not belong on a May close.

• Fixed assets and the depreciation entry from the CPA, not a guess from last year.
• Owner equity: draws, distributions, contributions, and related party loans.
• Payroll tie out for the full year, not only December, if payroll is in scope.
• 1099 vendor flags only. Legal names and worker type. Collection of W-9s is a different job.
• Retained earnings after QuickBooks moves last year net income.
• The CPA pack, then Close the books with a closing date password.

Publication 583 says your books must show gross income, deductions, and credits, and you must keep supporting documents. Electronic storage systems have to meet the same requirements as paper. (Publication 583) A year file you cannot reconstruct is not closed. It is a draft with a lock icon.

One row per client per calendar year (or fiscal year). Owner is bookkeeper or CPA. Done by is a date, not "when we get to it."

Intuit tells you to review accounts, enter outstanding invoices, expenses, and payments, reconcile up to the lock date, and review inventory before you lock. Sign in as a primary admin or company admin. (Lock your books in QuickBooks Online)

The monthly recon stop rule still holds: difference is $0.00 or a named break. Year end means the statement date is 12/31 (or the last day of the fiscal year), not "close enough." Outstanding checks and deposits in transit belong on the recon, not in a suspense account you hope the CPA will like.

Accruals, prepaid, and depreciation are reviewer work. If the CPA sends the depreciation schedule, post that entry. Do not invent a half year convention in the file because January is busy. If the CPA has not sent it, lock with a warning, list depreciation as open, and wait. Then use the Exceptions to Closing Date report after they post, or after you post what they sent.

Pull the equity accounts and the owner loan accounts for the year. Every distribution, draw, contribution, and "loan" needs a source. A transfer to a personal account coded to Office Expense will survive December and fail in April.

Payroll for the year is the year end payroll W-2 checklist. On this board you only confirm the books agree to the payroll report. Fringe and more than 2 percent S corporation health insurance belong on that W-2 page, not as a plug here.

1099 work on this page is a flag, not a filing. Note vendors that look reportable. Do not build Forms 1099 from a QuickBooks year end close. That list, W-9s, and thresholds live on their own collection job.

Send a named set, not a screenshot of the dashboard. Put it in the year folder. Tell the CPA what is still open.

When a new fiscal year starts, QuickBooks Online moves last year net income to the retained earnings account on the balance sheet. Intuit notes that this retained earnings account is not the same as the retained earnings line item shown on the balance sheet. Check both after January 1 (or the first day of the new fiscal year) so you do not "fix" a normal close out. (Lock your books in QuickBooks Online)

Intuit's steps, as of the help page dated 15 September 2026: Settings, Account and settings, Advanced, Accounting, Edit. Turn on Close the books. Enter a Closing date. You cannot edit transactions before that date unless you pass the security option you picked. Choose Allow changes after viewing a warning, or Allow changes after viewing a warning and entering password. Save. Only a primary admin or company admin can do this. (Lock your books in QuickBooks Online)

Use the password option. A warning alone is a courtesy. January invoices get dated 31 December when someone is in a hurry. Give the CPA the password when they are posting adjustments, or post their list yourself, then change the password if your process says so.

To change the closing date or the password: sign in as primary admin or company admin, same Accounting section, Edit, change the date or enter a new password, Save, Done. (Edit your closed books in QuickBooks)

After the CPA posts (or you post their entries), run Exceptions to Closing Date. Reports, Standard reports, search Exceptions to Closing Date. Every line should be an entry you expected. If a user dated a bill into last year to make a vendor happy, reverse it. (Edit your closed books in QuickBooks)

The IRS says keep records that support an item of income, deduction, or credit until the period of limitations for that return runs out. Returns filed before the due date are treated as filed on the due date. Keep copies of filed returns. (How long should I keep records?)

• 3 years in the usual case, if the longer rules below do not apply.
• 3 years from filing the original, or 2 years from paying the tax, whichever is later, if they file a claim for credit or refund after they file.
• 7 years for a claim for a loss from worthless securities or a bad debt deduction.
• 6 years if they do not report income they should report, and it is more than 25% of gross income shown on the return.
• Indefinitely if they do not file, or if they file a fraudulent return.
• Employment tax records at least 4 years after the tax becomes due or is paid, whichever is later.
• Property records until the period of limitations expires for the year they dispose of the property.

When tax years no longer need a record, the IRS still says to check insurance and creditors before you throw it out. Publication 583 says the same retention idea: keep records as long as they may be needed to administer any provision of the Code. (Publication 583)

Download the QuickBooks Online year end close checklist. One sheet per client per year. Copy the CPA pack list into the Notes column for that file.

The tax season operator can draft the chase for statements and owner answers that are still blank. Your staff approve what goes out. Your CPA reviews and signs every return.