How to Create an Accountant's Copy in QuickBooks

Instead of compiling and exporting a long list of reports to send to your CPA why not send them an Accountant's Copy from QuickBooks instead.  Creating an Accountant’s Copy is very easy and it just takes a few short steps.  Before we get into those, let's first explain what an "Accountant's Copy" is.

If you are using QuickBooks you are probably familiar with backing it up.  For us in the accounting world, that is one way of getting a company file from a client.  It is best to backup your company file on a USB drive and then give it to your accountant.  The problem with this is that you CANNOT work in your company file while your accountant has it.  Backup copies do not merge with one another.  They rewrite all of your existing data.  So if you gave your accountant a copy of your company file (via a backup on a USB drive) and then you continued to work in your file... ALL of your changes would be erased once you uploaded the accountant's backup back on to your computer.

The other way accountant's work on client's QuickBooks files is to remote on to the client's computer.  (There is some work that has to be done before this happens).  When your accountant remotes on to your computer they literally take your computer over.  Intuit has a remote service they offer for a fee that lets the accountant only access QuickBooks but they are still on your computer (just remotely).  When they are working on your computer you cannot use it.

As you can see, there are issues with both the backup and remote access options.  Giving you CPA a backup doesn't work because you wouldn't be able to use your QuickBooks file for several months.  The remote access option doesn't work either because you'd never know when your CPA was going to need to log on to your computer.  This is where the Accountant's Copy comes in.

An Accountant's Copy is just like a backup (but with a couple differences).  The first, and most important difference) is that the two files merge back together.  This means that you can continue to work in your company file while your CPA has it.  The second difference is that an Accountant's Copy is not backed up on a USB.  It is uploaded to Intuit's secure website.  You can do this by following a few easy steps below.  Your CPA is notified (via email) that you have sent them an Accountant's Copy.  There is a link in that email to download the file.  

The Accountant's Copy is not perfect but it is the best way of sending your CPA your financials at the end of the year.  Keep in mind, once you send an Accountant's Copy to someone you cannot edit anything in that period (for example, if you sent your CPA an Accountant's Copy of last year you would not be able to edit anything in that period).  This will also be explained below.

Now...let's get started.

In your QuickBooks company file...

1.  Go to File > Accountant’s Copy > Send to Accountant

2.  Click “Create Accountant’s Copy”

3.  Click “Next”

4.  Under “Dividing Date” select “Custom” and then enter 12/31/12.

5.  Click “Next”

6.  Enter your CPA’s email address

7.  Reenter your CPA’s email address

8.  Enter your name

9.  Enter your email address

10.  Click “Next”

11.  Create a strong password (make sure it’s at least 7 characters long and includes at least 1 digit and at least 1 capitol letter) – MAKE SURE YOU WRITE THIS PASSWORD DOWN

12.  Retype password

13.  If you want to include a note for your CPA write it in the box below.  DO NOT WRITE THE PASSWORD HERE.  I always recommend sending the Accountant’s Copy first and then emailing (or calling) your CPA with the password.

14.  Click "Send"

Voila.  You have just sent your CPA an Accountant's Copy from QuickBooks.  It was that easy.  Now all you have to do is email/call your CPA with the Accountant Copy password. 

Unfortunately there are some restrictions in your QuickBooks file once that copy is sent.  For example, you cannot edit or delete an account in the Chart of Accounts (even if that account has never been used).  You also cannot edit or delete any information in the prior year.  If you try and edit or delete something that would affect the Accountant's Copy you will receive this error:

Don't freak out.  There is a way of removing the restrictions that are applied once an Accountant's Copy is sent.  Please keep in mind that if you remove the restrictions your CPA will not be able to import their adjusting entries into your company file.  Make sure you check with your CPA before proceeding.

To remove the Accountant's Copy restrictions go to File > Accountant's Copy > Remove Restrictions.  This box will then pop up:

Click the box (Yes, I want to remove the Accountant's Copy restrictions) and then click "OK".

Now you may be wondering... "What happens if my CPA doesn't have compatible software?" or "What if my CPA prefers actual financial statements?".

Most CPAs I know prefer to be sent an Accountant's Copy of the QuickBooks file in question.  Very few prefer to just be sent financial statements.  However, if you have an old version of QuickBooks you may have to send your CPA actual financial statements.  Your CPA may  have a version  of QuickBooks that is not compatible with your file (they have to have the same year or the year after that).  For example, if you have QuickBooks 2009 your CPA would have to have either QuickBooks 2009 or 2010 to make any adjusting entries in your company file.

If this happens, or if your CPA prefers that you send them your financials instead of an Accountant’s Copy here is most likely what they will need:

Profit & Loss (Reports > Company & Financial > Profit & Loss Standard)

Balance Sheet (Reports > Company & Financial > Balance Sheet Standard)

Trial Balance (Reports > Accountant & Taxes > Trial Balance)

General Ledger (Reports > Accountant & Taxes > General Ledger)

Your CPA may request additional reports but in my experience, these four are the most crucial. 

Good luck everyone.  As always, if you have any questions please leave a comment below or email us at info@kerrbookkeeping.com.