# What does my CPA or tax preparer need from my books at year end, and how do I hand the books over cleanly?

Applies to: United States · Updated 2026-09-28

Send what your books produce: the year-end trial balance, general-ledger detail, balance sheet and profit and loss, with support behind each balance and schedules for assets, loans, owner transactions and related parties. Reconcile the file, lock the year with a password, then send reports, a file copy or access with your open questions listed; record what was sent, bring the books into agreement with what comes back, and keep the package for the IRS record-keeping period.

## What does the preparer actually work from?

The preparer works from three outputs of your ledger, run as at the last day of your fiscal year:

- **The trial balance.** AccountingCoach's undated explanation of the trial balance describes a report listing the balance of each general ledger account, still useful to accountants who wish to show balances before their proposed adjustments, the adjustments and the balances after.
- **General-ledger detail for the year.** AccountingCoach's undated explanation of the general ledger describes the accounts used to sort and store information from a business's transactions. Because each account holds its transactions, the year's detail lets the preparer trace any balance to its entries.
- **The balance sheet and profit and loss.** IRS Publication 583 says these statements can help you in dealing with your bank or creditors. AccountingCoach's explanation of the trial balance says the adjusted amounts are used in the organization's financial statements, so the statements must agree with the trial balance.

State the accounting basis of every report. Intuit's article on choosing cash or accrual methods in QuickBooks Online says an individual report can be customized to use a different method. Reports run on mixed bases will not agree.

Sending bank statements and receipts instead makes the preparer rebuild work your books already did; which source documents the business must supply is a separate question.

## Which balances need support, and what counts as support?

Treasury Department Circular No. 230, which governs practice before the IRS, says a practitioner preparing or signing a return generally may rely in good faith, without verification, on information the client furnishes. The same paragraph says the practitioner may not ignore the implications of information furnished or actually known, and must make reasonable inquiries if it appears incorrect, inconsistent with an important fact or another factual assumption, or incomplete. An unsupported balance is taken on trust or becomes a question. In this package, support means a reconciliation, schedule or outside statement that agrees to the balance; ask your preparer whether they need more.

This package list pairs each item with its purpose, its support and its readiness state:

| Item | What it is for | Support to attach | Ready when |
|---|---|---|---|
| Trial balance | Every account's year-end figure | The rows below | Run as at the fiscal year-end on the stated basis after the year is locked, with its totals and net income copied into the cover note |
| General-ledger detail | Tracing balances to entries | None | Covers the whole fiscal year |
| Balance sheet and profit and loss | The year in summary | None | Totals agree with the trial balance |
| Bank and card accounts | Cash and card balances | Year-end reconciliation and statement | Reconciled, with no unexplained items |
| Receivables and payables (accrual basis) | Amounts owed to and by the business | Year-end aging reports | Aging totals equal the accounts; on the cash basis, list open invoices and bills only, as they reach income or expense when paid |
| Fixed assets | Depreciation and gain or loss | Schedule of the year's additions and disposals: date and manner of acquisition, purchase price, cost of improvements, how the asset is used, date and manner of disposal, selling price and expenses of sale | Schedule agrees with the asset accounts |
| Loans | Principal owed and the year's interest | Each lender's year-end statement | Each balance agrees with its statement |
| Payroll liabilities | Withholding and payroll taxes owed | Payroll register and payroll tax filings | Balance equals the unpaid amounts shown |
| Sales tax payable | Tax collected, not yet remitted | Sales tax returns and payment records | Balance equals tax due and unpaid |
| Inventory, if held | Cost of goods sold | Year-end count and valuation | System quantities agree with the count, and the inventory account equals the valued count |
| Owner equity | Contributions, draws and distributions | Schedule of each owner's money in and out | Schedule agrees with the equity accounts |
| Any other balance-sheet account (for example prepaid expenses, accrued liabilities, deposits) | What makes up the balance | Schedule listing each item | Schedule total agrees with the account |
| Cover note | Scope, basis, known issues, open questions | None | Every open item listed |

## What does a summary hide that the preparer still needs?

A balance shows where an account ended, not what moved it. Send a schedule for each of these:

- **Assets bought and sold.** The IRS's page "How long should I keep records?" says property records are needed to figure depreciation, amortization or depletion and the gain or loss when you sell or otherwise dispose of the property. IRS Publication 583 lists what asset records should show, including when and how you acquired each asset and when and how you disposed of it. A net change in the equipment account shows neither.
- **Loans.** Send each lender's year-end statement with a schedule; suggested columns are opening balance, new borrowing, principal repaid, interest and closing balance, and your preparer may ask for more.
- **Owner contributions and draws.** List each owner's money into and out of the business by date, a suggested layout your preparer may ask to extend. Business costs an owner paid personally do not appear in the ledger unless recorded, and personal costs the business paid appear as ordinary payments, so list both.
- **Related-party transactions.** AccountingTools' article on related party transactions (updated February 3, 2026) describes them as dealings with parties with which an entity has a close association, and its examples include owners of the business, its managers, and their families. In the ledger they look like any other vendor, so name each related party and the dealings.

## What state must the file be in before it goes?

Clear these before anything is sent:

- **Accounts reconciled and complete.** Intuit's article "Lock your books in QuickBooks Online" lists, as checks before locking, reconciling your accounts up to your lock date, entering any outstanding invoices, expenses and payments, and reviewing all accounts for completeness and accuracy.
- **Clearing and suspense accounts resolved.** A balance in an uncategorized, suspense or "ask my accountant" account is unexplained by definition: code it, or put it on the open-questions list.
- **Undeposited and unapplied items cleared.** Intuit's "Year-end guide for QuickBooks Online" says QuickBooks includes undeposited funds in income, and that you still need to move the funds to the bank register that receives them. Match unapplied customer payments and vendor credits to their invoices and bills.
- **Known miscodings dealt with.** Correct them, or list each with its amount and the account it belongs in.

The same year-end guide advises reconciling all accounts monthly, saying this keeps data balanced and accurate at year end; keeping clearing accounts and owner schedules current too shrinks next year's package.

### What is the preparer engaged to fix?

Circular 230's best practices for tax advisors call for a clear understanding with the client about the form and scope of the assistance, so settle which engagement you have:

- **Working from the books as delivered.** The preparer relies on your figures and adjusts what the return needs. Unless your engagement letter says the preparer will reconcile, clear or recode, plan to finish these yourself before sending; anything left unresolved may be relied on as you sent it.
- **Cleanup included.** Put that scope in writing, still send your known-issue list, and expect more adjustments back.

## Should you send reports, a copy of the file, or access to the live file?

The modes differ in what the preparer sees and changes, and what you must protect:

| Mode | What the preparer sees | What the preparer can change | What you protect |
|---|---|---|---|
| Reports package | Only what you send | Nothing in your books; adjustments come back for you to post | Saved copies of what you sent |
| Copy of the file | The whole file as at the copy date | Their copy; your system decides how changes return | Your live year, so it does not drift from the copy |
| Access to the live file | The whole file as it stands | What your system lets that user change (in QuickBooks Online, accountant users can review your books and make corrections) | A record of who changed what, and when |

The system specifics below cover only QuickBooks Online and QuickBooks Desktop, and include no file-copy route for QuickBooks Online. On any other system, check the vendor's own documentation before choosing a mode: whether it offers a file copy, accountant access, a password lock on a closed period and a report of changes after the closing date.

For QuickBooks Desktop for Windows, Intuit's article on creating an Accountant's Copy says it creates a continuous workflow between you and your accountant, restricts certain activities in your file to prevent conflicts, and has you import the accountant's changes when the file comes back. The same article says its steps apply to QuickBooks Desktop for Windows only, so on another edition, check Intuit's documentation for that edition before choosing an Accountant's Copy. It also has you enter a dividing date; agree that date with your accountant before sending. Intuit's article "Use journal entries to adjust your client's books" describes the plain-copy route: the accountant emails journal entries from a copy for the client to add. The journal-entries article presents this route for small adjustments and says that, to get books ready for tax purposes, it is best to work on an Accountant's Copy instead. For QuickBooks Online, Intuit's "Invite accountant users" says accountant users have access to specific accountant tools to review your books and make corrections.

Reports suit a preparer working from the books as delivered and leave you sole control of the figures. A copy suits a preparer who must explore the file, if you accept how your system returns their changes; on QuickBooks Desktop for Windows, following Intuit's advice above, a year-end tax engagement that uses a copy should use the Accountant's Copy. Live access suits a cleanup or direct posting, only with the controls below.

### What changes if the preparer posts in your live file?

Set these controls before access starts:

- **Their own login.** Give the preparer their own user, never yours, so their entries carry their name. Intuit's "Add and manage users" for QuickBooks Online says that when you delete a user, you can still view their history in the audit log.
- **One poster per period.** While the engagement runs, you post nothing dated in the handed-over year, and the preparer posts only their adjustments, through the locked-period route below.
- **A check afterwards.** Intuit's "Edit your closed books" says QuickBooks Online's Exceptions to Closing Date report shows changes made after you close your books, and "Close your books in QuickBooks Desktop" says changes made after the closing date to transactions dated on or before it appear in the Closing Date Exception Report. Compare the report with the preparer's adjustment list.
- **An end date.** When the adjustments are in, save the exception report with the preparer's adjustment list in the handover file before removing the preparer's access, then change the closing-date password, which "Edit your closed books" covers.

## How do you fix what was sent so it cannot move unnoticed?

Lock the year before the package goes, whatever the mode. Intuit's "Lock your books in QuickBooks Online" says locking stops changes to past transactions and offers two settings: with a warning only, users see a warning but can still make changes; with a password, users must enter a password to make changes. Choose the password. Intuit's "Close your books in QuickBooks Desktop" says Desktop still lets you enter transactions affecting a closed year, but either tells you it is not recommended or asks for the closing-date password if you set one.

Record the as-at state in the cover note: when the reports were run, the basis, the trial balance totals, net income and the closing date. Save the reports exactly as sent. After the engagement, rerun the year's trial balance: any change that is not a preparer adjustment means the period moved, and, provided the lock stayed on throughout, the exception report shows which transactions.

Adjustments into a locked period, including one locked or reported on before the engagement, need an authorised route: keep the lock on, and let one person with admin rights (Intuit's lock article has you sign in to QuickBooks Online as a primary or company admin to lock the books) enter or share the closing-date password for the preparer's adjustments. Do not turn the lock off or move the closing date, because Intuit describes its exception reports as showing changes made after the books are closed. Change the password once the adjustments are in, and note each step in the handover record.

## How do you send known issues and open questions?

Put them in the cover note. Under the Circular 230 rule above, a practitioner generally may rely on your figures in good faith without verification and must make reasonable inquiries if something appears incorrect, inconsistent or incomplete, so a problem you do not list may pass into the return unquestioned. The note should cover:

- Each known issue, with its account, amount, what you know and what is missing
- Each balance you cannot explain
- Events of the year, such as new loans, assets sold, a new owner or related-party dealings
- Questions that need the preparer's judgment, each with the facts behind it

## What comes back, and what must you do with it?

When you agree the engagement, ask for three things back:

- Adjusting entries arrive as a list to post, an Accountant's Copy to import, or entries made in your live file.
- The adjusted trial balance shows your balances after the preparer's adjustments.
- The return comes back as filed, and the IRS's page on keeping records says to keep copies of your filed tax returns.

Once the adjustments are in, your year-end trial balance must agree with the preparer's adjusted trial balance, account by account; otherwise next year starts from balances nobody reported. If only a list of entries comes back, your trial balance must agree, account by account, with the one you sent plus those entries. Posting the entries correctly is a separate question, as is explaining any remaining difference between the books and the filed return.

If a lender or investor already holds figures for the year, compare each adjustment with them. For example, on the accrual basis, the lender holds net income of 58,210.00, and the preparer adds an unrecorded December bill of 3,200.00 and moves 1,500.00 from repairs expense to equipment. Adjusted net income is 58,210.00 minus 3,200.00 plus 1,500.00, or 56,510.00, which is 1,700.00 below the lender's figure. Record the difference and its cause, and check the loan or investment agreement for whom you must tell and how; correcting figures already issued is a separate question.

## What record of the handover do you keep, and for how long?

Keep one handover file that holds:

- The cover note, with the as-at state and open questions
- Each file exactly as sent, with the date and recipient
- The mode used, who had access, and when access ended or the password changed
- What came back, when, and when it was posted, with any saved exception report

The package and its support back up figures on the return, so IRS record-keeping rules apply. The IRS's page "How long should I keep records?" says that, generally, you must keep records that support an item of income, deduction or credit on your tax return until the period of limitations for that return runs out. It gives these periods for income tax returns, counted from when the return was filed unless a row says otherwise, and treats a return filed before the due date as filed on the due date:

| Situation | Keep the records |
|---|---|
| None of the unreported-income, no-return or fraudulent-return situations below applies | 3 years |
| You file a claim for credit or refund after you file your return | 3 years from filing the original return or 2 years from paying the tax, whichever is later |
| You file a claim for a loss from worthless securities or a bad debt deduction | 7 years |
| You do not report income you should report, and it is more than 25% of the gross income shown on your return | 6 years |
| You do not file a return | Indefinitely |
| You file a fraudulent return | Indefinitely |
| Employment tax records | At least 4 years after the tax becomes due or is paid, whichever is later |

The same page says to keep records relating to property, generally, until the period of limitations expires for the year you dispose of the property, and, for property received in a nontaxable exchange, the old property's records as well as the new until it expires for the year you dispose of the new property. The fixed-asset schedule follows that clock.

On form, IRS Publication 583 says all requirements for hard copy books and records also apply to electronic storage systems that maintain tax books and records, which must index, store, preserve, retrieve and reproduce the records in legible format and provide a complete and accurate record accessible to the IRS. It adds that when you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law. Access to a QuickBooks Online file depends on the subscription: Intuit's article on QuickBooks Online data after you cancel says a cancelled subscription leaves read-only access for one year, and that if a card is declined and billing is not updated within 14 days, the account is suspended until you re-subscribe. Keep the package and its support where they can be retrieved and reproduced legibly for the retention period above.

Before discarding anything, the same IRS page says to check whether you must keep records longer for other purposes, noting that an insurance company or creditors may require it. A state tax agency's own record-keeping rule is a separate requirement to check.

## Sources

1. AccountingCoach, LLC (Harold Averkamp, CPA, MBA) — *What is a trial balance?*, undated. https://www.accountingcoach.com/blog/what-is-a-trial-balance
2. AccountingCoach, LLC (Harold Averkamp, CPA, MBA) — *What is a general ledger?*, undated. https://www.accountingcoach.com/blog/what-is-a-general-ledger
3. Intuit Inc. — *Choose between cash and accrual accounting methods in QuickBooks Online*, updated 8/5/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/product-preferences/choose-cash-accrual-accounting-methods-reports/L64yocn6B_US_en_US
4. U.S. Department of the Treasury, Internal Revenue Service — *Treasury Department Circular No. 230, Regulations Governing Practice before the Internal Revenue Service*, Rev. 6-2014. https://www.irs.gov/pub/irs-pdf/pcir230.pdf
5. Internal Revenue Service — *How long should I keep records?*, page last reviewed or updated 30-Jun-2026. https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records
6. Internal Revenue Service — *Publication 583, Starting a Business and Keeping Records*, revised December 2024. https://www.irs.gov/publications/p583
7. AccountingTools, Inc. (Steven Bragg) — *Related party transactions and disclosures*, February 3, 2026. https://www.accountingtools.com/articles/related-party-transactions-and-disclosures.html
8. Intuit Inc. — *Lock your books in QuickBooks Online*, updated 9/15/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/close-books/close-books-quickbooks-online/L59LelyPM_US_en_US
9. Intuit Inc. — *Year-end guide for QuickBooks Online*, last updated 8/21/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/year-end-processes/year-end-guide-quickbooks-online/L12AH6Ukb_US_en_US
10. Intuit Inc. — *Create an Accountant's Copy of your company file in QuickBooks Desktop*, updated 8/5/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/company-file/create-accountant-copy-company-file-quickbooks/L7vx8V8F3_US_en_US
11. Intuit Inc. — *Use journal entries to adjust your client's books*, updated 8/5/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/journal-entries/use-journal-entries-adjust-clients-books/L3TVvA6HY_US_en_US
12. Intuit Inc. — *Invite accountant users*, updated 8/28/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/account-management/managing-accountant-users-quickbooks-online/L2AcdYvHw_US_en_US
13. Intuit Inc. — *Add and manage users*, updated 8/5/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/manage-users/add-manage-users-quickbooks-online/L1welhiJZ_US_en_US
14. Intuit Inc. — *Edit your closed books in QuickBooks*, updated August 5, 2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/customer-company-settings/edit-closed-books/L76xHuaZ5_US_en_US
15. Intuit Inc. — *Close your books in QuickBooks Desktop*, updated 8/5/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/close-books/close-books-quickbooks-desktop/L8T1Cgfhk_US_en_US
16. Intuit Inc. — *What happens to my QuickBooks Online data after I cancel?*, updated 8/5/2026. https://quickbooks.intuit.com/learn-support/en-us/help-article/access-permissions/happens-quickbooks-online-data-cancel/L6qDpbE1B_US_en_US

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