How can you prevent changes to last year's financial numbers in QuickBooks?

Setting a Closing Date in company settings is an effective way to prevent changes to last year's financial numbers in QuickBooks. When you designate a closing date for your financial data, it locks the entries in closed periods, meaning that no adjustments can be made to the transactions recorded before that date without entering a password. This feature is particularly valuable for maintaining the integrity of financial reporting and ensuring compliance during audits, as it helps to confirm that prior year data remains stable and unaltered.

In contrast, backing up data is more about creating a safe copy of information rather than restricting changes. While archiving old data can help manage storage and focus on current information, it does not inherently restrict modifications to past financial records. Creating a new company file each year is an alternative approach but can be cumbersome and not practical for companies that wish to maintain a complete historical record of transactions in one file. The Closing Date feature specifically addresses the need for protection against unauthorized modifications to past financial records, making it the most suitable choice for this scenario.