Sharlynn Garza has two great tips for QuickBooks users in her post Quickbooks Tips at the Nonprofit/Government GPS blog..
One of the things that can create a mess in QuickBooks is to make a change in prior year data that has already been closed out or even audited.
One of the underappreciated dangers of changing prior year data is a loss of credibility for the finance staff. When a new report has prior numbers that don’t equal what was on previously distributed reports, the finance team looks bad. The board can lose confidence in your abilities if the previous numbers change and the report users think prior data is fluid.
Ms. Garza points out two things you can do to avoid changing previous amounts.
First, set a closing date. She describes the process – check out her post. This prevents you from unintentionally changing prior amounts.
Second, she offers a creative way to void checks from prior years without changing prior numbers. See her post for a clear explanation. In accounting shorthand, you void the check, prepare a journal entry as of the same date to repost the activity on the check, and then prepare a journal entry in the current month to reverse the journal entry. Superb idea!
Read her post for a good yet brief explanation.