What is a Fiscal Year?
- Every business functions either in a fiscal year or a calendar year. It is imperative that to maintain all the forms and records, a business chooses its fiscal year. It is also important for government reports and taxes. Hence, updating your fiscal year is a crucial step.
- If you happen to use QuickBooks for all your company accounting, then you might have sometimes wondered about how to set up a fiscal year in QuickBooks. So in this article, we will tell you the step-by-step process to do so.
- But before we answer the above question, it is important that we talk about what is a fiscal year and why it is important.
- It is a period of time that does not necessarily start from the beginning of the calendar year. It is the period of 12 months that a company uses for its accounting reports. Fiscal years are also accepted legally by the government for financial reports.
- To go by the definition of the IRS (Internal Revenue Service) a fiscal year is defined as a time period of 12 consecutive months that ends on the last day of any month, except for December. Choosing to go for the end of the financial year has its own effects on the business and hence must be chosen as per the convenience of your company and its functions.
How to Set up a Fiscal Year in your QuickBooks Online?
If you are an active user of QuickBooks online, and you want to set up the fiscal year, then it is actually a very easy process to do so.
If you want to set up a fiscal year for your company, then all you have to do is follow the steps mentioned below:
The primary set up
- After you have logged into your QuickBooks online account, you have to click on the Settings icon on the top right corner.
- Followed by that, you need to click on the Account and Setting option.
- Next, click on the Advanced tab and move to the Accounting section.
- Enter the first month by hitting the Edit button and entering the month.
- Once done, click on Save and then on the Done button.
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How to close a fiscal year, steps:
- Go to the Settings button on top, followed by the Account and Setting option.
- Open the Advanced tab and click on the Edit icon in the Accounting section.
- Select the option, Close The Books on the checkbox.
- Before clicking on Save, enter the closing date.
Different method to set up a fiscal year in QuickBooks desktop.
Here are the steps for that : Primary setup for fiscal year
- Login to the QuickBooks desktop account and go to the company menu.
- Click on the My Company menu and select the My Company option.
- Now go to the Company Information option window and then choose the Edit icon.
- Choose the Accounting option, followed by the Report Information tab.
- Lastly, click on the first month of the fiscal year.
How to close the fiscal year in QuickBooks desktop?
If you want to close your fiscal year in QuickBooks desktop, then all you need to do is follow these steps:
- Open the Edit menu.
- Select the Preference option.
- Click on the Accounting menu.
- Visit the Company Preference tab.
- Select the Closing Date section and choose the Set Date/Password option.
- Go to the closing date field and just click on Remove the Date.
- Lastly, all you need to do is click on the OK button.
You can now set up your budget for the all new fiscal year in the QuickBooks desktop version
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Once you have ensured that you have entered the correct financial year, you can easily create the new budget.
- With the updated fiscal year, you can follow the steps given below and proceed
- Click on the menu tab that has the Company tab.
- Select the Planning and Budgeting option.
- Hit the Set Up Budgets option.
- Ensure that you enter the correct year and type of your budget.
- Click on the Next option and end the process by clicking on the OK button.
In this article, we told you about all that you need to know about the fiscal year and its importance in your business accounts. We also gave you a step by step guide of how to change your fiscal year dates including the start dates and the end dates. You can also take help to understand how to set up your fiscal year online. If you still have any further questions, you can reach out to QuickBooks support number on their website or their helpline number.
Frequently Asked Questions
A: Since the fiscal year is related to government and public money , it is considered to be the time period when the accounting of revenue, taxes, etc is done. Financial year on the other hand is picked up by a business as its accounting year. A fiscal year and a financial year may coincide or may be different too.
A: The Internal Revenue Service (IRS) defines the calendar year to be from 1st January to 31st December. A fiscal year is defined as any period of time that has 12 consecutive months that ends on the final day of any month except December.
A: Start by clicking on the Opening Bal Equity option and access the account to register. Change the date of each transaction you want.
A: At the end of the fiscal year, many things need to be taken care of. This includes drawing of financial statements, preparation of tax returns, filing of GST/HST returns and much more. If the date fixed of your fiscal year end does not suit your company, then it can also be changed but only under certain circumstances.
A: In order to change your fiscal year, you must change your tax year too.