Monday, January 2, 2012

QuickBooks: Great COA Security Trick!

RESTRICTING CHANGES TO THE CHART OF ACCOUNTS BY USING THE 1099 SETUP

Why is this trick needed? Any user with security authorization to create or modify "sensitive accounting activities" can make changes to the Chart of Accounts. Although these changes are made with the best of intentions, the results are not always optimal.

The Strategy Behind the Trick: You can prevent unapproved changes to the Chart of Accounts by using the 1099 Company Preference. Users with full rights or the administrator rights can still make changes. By following this 1099 setup, users will be unable to delete an account or change the type of account for any accounts you choose. Likewise, they will be unable to merge accounts. When trouble-shooting this issue, you can reverse a change in account type, however, merging accounts is permanent.

The Closing Date does not stop changes, and if charges are made, the affect all previous years.

Use the 1099 setup feature by selecting the Edit menu, selecting Preferences, selecting Tax:1099, and then selecting the Company tab. QuickBooks displays the list of possible 1099 categories. Select a 1099 Category that you will not be using in the normal course of business. For instance, if you never use box 13 - Excess Golden Parachute, then that is a great option for this trick.

Select the middle column, with the heading titled Account. Click on the drop-down arrow next to the category you have chosen (Box 13), QuickBooks displays the Chart of Accounts. Select Multiple Accounts and then manually select all the accounts you would like to protect.

NOTE: You may only assign an account to one 1099 Box. If an account has already been added in your 1099 setup, then that account is already protected.

Inactive Accounts do not show up in this selection window. You do not need to select Accounts Receivable and Accounts Payable as these accounts do not allow changes of types and/or merging. If a new account is added that we want to protect, then it has to also be added to the multiple accounts selected in the 1099 Preferences.

NOTE: If you would ever like to merge an account that is protected using this method, you can simply return to this preference screen and deselect those specific accounts prior to making any changes.

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