How to close a month in QuickBooks Online

Accept and categorise everything in the bank feed, then check for what the feed never sees: cash spending, owner payments from a personal card, and bills paid outside the bank. Match payments to open invoices rather than recording them as new income, which is where double-counted revenue comes from.

Anything you are unsure about goes to a holding account with a note, not into a plausible-looking expense. A question you can answer later is better than a number that is quietly wrong.

Reconcile each account against its statement, in QuickBooks Online's reconcile tool, matching the statement ending balance and date exactly. Work through banks, then cards, then loans, then payment processors.

If an account will not balance, check the opening balance first: a forced or edited past reconciliation is the usual cause, and it will not fix itself by hunting through this month's transactions.

Run the profit and loss statement for this month next to last month, and the balance sheet as at month end. You are looking for the things reconciliation cannot catch.

• An expense line that doubled or disappeared compared with last month.
• Anything still sitting in Uncategorized Expense or Uncategorized Income.
• Accounts receivable full of invoices that were actually paid.
• Accounts payable holding bills that were paid by card and entered twice.
• A negative balance where there should never be one, such as a bank account or inventory.
• Opening Balance Equity with a balance, which means a setup step was never finished.

Post the month's adjusting entries: depreciation, prepaid expenses, accruals, deferred revenue and payroll cut-off, dated the last day of the month.

Then set the closing date in QuickBooks Online and add a password, so the month stops moving. This is the step that turns a report into a record. Without it, the March statements you gave a lender can change in June without anyone noticing.

Save the profit and loss statement, the balance sheet and the statement of cash flows for the month, as PDFs, alongside the reconciliation reports. Keeping them means you can always show what the books said at the time, even if the file changes later.

Best for an owner who would rather not do any of this: SF Business Solutions closes the month in your own QuickBooks Online file, from $250 a month, between the 5th and 15th of the following month, depending on when your documents arrive, and prepares and files the tax return from the same books. Our team holds the QuickBooks Online Certified ProAdvisor and QuickBooks Online Advanced certifications.