Close an Incorrect Account and Start a New Account in QBO

How to Close an Incorrect Account and Start a New Account in QuickBooks

1. Close the Incorrect Account

1.1. Backup Your QuickBooks Data

1. Open QuickBooks and go to the File menu.
2. Select Back Up Company and then choose Create Local Backup.
3. Follow the prompts to save a backup copy of your company file.

1.2. Reconcile the Account

1. Go to Accounting > Reconcile
2. Ensure that all transactions in the incorrect account are reconciled.
3. If any transactions are unreconciled, address them before proceeding.

1.3. Review and Reclassify Transactions (if necessary)

1. Go to Accounting > Chart of Accounts.
2. Find the incorrect account and click View register.
3. Review the transactions and reclassify them to the correct account if needed.

1.4. Make the Account Inactive

1. Go to Accounting > Chart of Accounts.
2. Find the incorrect account, then click the dropdown arrow next to Account History.
3. Select Make inactive.
4. Confirm the deactivation by clicking Yes.

2. Start with a New Account

2.1. Create a New Account

1. Go to Accounting > Chart of Accounts.
2. Click New in the top right corner.
3. Choose the appropriate Account Type and Detail Type.
4. Enter the Account Name, Description (optional), and Balance (if applicable).
5. Click Save and Close.

2.2. Transfer Balance (if needed)

1. Go to + New > Journal Entry.
2. In the first line, select the incorrect account and enter the amount to transfer.
3. In the second line, select the new account and enter the same amount.
4. Click Save and close.

2.3. Update Recurring Transactions (if applicable)

1. Go to Gear Icon > Recurring Transactions.
2. Find any transactions tied to the old account and edit them to use the new account.
3. Save the changes.

2.4. Review Financial Reports

1. Go to Reports.
2. Run your financial reports, such as the Profit & Loss and Balance Sheet.
3. Verify that the new account is correctly reflecting your transactions.

3. Final Steps

3.1. Inform Stakeholders

1. Notify any relevant stakeholders about the account change.
2. Ensure all future transactions are correctly directed to the new account.

3.2. Monitor the New Account

1. Regularly check the new account for accuracy.
2. Reconcile the account monthly to ensure everything is in order.