How can I change the Financial Year of my QuickBooks Company File?

This week I have two customers asking me about how they can change the Financial Year of their QuickBooks Company File.

If you made a mistake in the Financial Year during the creation of your QuickBooks Company File, you can edit this Financial Year information by going into the Company menu, Company Information, and edit the information of your Financial Year from the ‘Financial Year’ field.

However, if your company already in business for many years, I will not suggest you to simple change the Financial Year information from the Company Information wizard.

For example, you have started your company file in QuickBooks since 2006 and your Financial Year is January-December; now, you wanted to change your Financial Year to April-March.

In this case, you have to do your 2009 closing from 1 January 2009 to 31 Mar 2010, which is 15 months of accounts. Hence, if you simply edit the Financial Year information from the Company Information wizard, the financial period for your past years year-end closing report will be change from January-December to April-March. The problem will arise if you are required to re-audit your file (you have to consider the data from year 2006).

Besides, you cannot base on your current set of data to do your prior year comparison if your financial year had changed. You cannot compare April 2010-March 2011 against April 2009-March 2010 as the actual financial period for 2009 was January 2009-March 2010 (15 months). 

Usually, for cases like this, I will suggest to start a new QuickBooks company file. You can export out the entire list item such as Chart of Accounts list, Item list, Name list and template list; and then, import it into your new QuickBooks Company file. Thereafter, record your opening balances into your new QuickBooks Company file accordingly.

This method will be better; you can refer back to your old data from the previous QuickBooks company file created and it will not cause confusion to your accounts.