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How QuickBooks condenses your company file

When you condense your company file, QuickBooks deletes transactions that you no longer need, replacing them with one of the following (depending on the option you choose):

  • One summary journal entry
  • A new general journal transaction for each month
  • No journal entry

You can also tell QuickBooks which transactions types to remove and to delete unused list entries.

Important: The condensing process changes your company file significantly. We suggest you print and review this topic before you proceed.

Which transactions are affected?

The condensing process has no effect on transactions dated after the ending date. For example, if your ending date is 12/31/15, all transactions dated 1/1/16 and later remain unchanged in your company file.

Of the transactions dated on or before the ending date, QuickBooks deletes and summarizes only those that have no effect on transactions dated after the ending date.

This table gives examples of the situations that cause QuickBooks to retain transactions dated on or before the ending date:

Situation

Examples

A transaction has an open balance

Unpaid or partially-paid invoices, undeposited customer payments, unpaid bills, unused credit memos.

A transaction is linked to another transaction that has an open balance

An undeposited customer payment that you applied to an invoice. Even though the invoice is paid, QuickBooks retains the invoice because it has a link to an open transaction (the undeposited payment).

A transaction is not marked as cleared

Unreconciled transactions in a checking or credit card account.

A transaction is marked as "to be printed"

Any invoice, credit memo, sales receipt, or check that has a checkmark in its "To be printed" checkbox.

QuickBooks summarizes deleted transactions

QuickBooks creates summary general journal transactions for the transactions it deletes from your file. Except for transactions that affect the value of your inventory, you can spot the summary transactions by looking for GENJRNL in the Type field of your registers.


If you tell QuickBooks to create a new general journal transaction for each month, there is usually one GENJRNL transaction for each month in which QuickBooks deleted transactions. The transaction amount is the total of the transactions that QuickBooks deleted for the month. For a given month, the register may also show other transactions that QuickBooks didn’t delete. QuickBooks retains transactions because future transactions may affect them.

The effect on inventory

You have 2 choices:

  1. QuickBooks removes all closed inventory transactions.
  2. QuickBooks removes closed inventory transactions until it finds an open inventory transaction. At that point, QuickBooks makes an inventory adjustment to summarize prices up to the date of that transaction. From that point forward, QuickBooks doesn’t remove any inventory transactions.

The effect on your reports

Condensing your company file affects the following types of reports for part or all of the period of time selected:

Account balances

After condensing your company file, you can still create reports that summarize financial activity for that period of time. QuickBooks adds summary transactions to your company file to preserve account balances. For example, if you condense last year's data, you can still create profit and loss reports that compare last year's results to this year's.

Transaction detail

You can't create reports that show daily detail for that period of time, because QuickBooks deletes the individual transactions that would normally provide the detail. Also, you can't create reports that show balances for individual customers or vendors over that period of time.

Cash basis

Cash basis reports won't be accurate for data included during that time period.

Sales tax

QuickBooks retains information about each of your taxable items and your tax agencies (vendors) so that you can get accurate reports about your tax liability. This is the case even if some of the transactions occurred within the period of time you condensed your company file.

The effect on payroll

QuickBooks retains payroll transactions dated in the current year (based on the date specified in your computer date and time settings) and payroll transactions in the prior year, regardless of the end date that you specify.

Example

If the current date is 02/15/16 and you enter 07/31/15 as the end date to remove all transactions dated in your prior fiscal year, QuickBooks will retain all payroll transactions dated from 12/31/14 through 02/15/16 (and later) and remove all payroll transactions dated on or before 12/31/14, unless other rules prevent the removal of these transactions.

This ensures that you preserve all of your payroll transactions dated in the 2015 and the 2016 calendar year.

The effect on estimates and time data

QuickBooks deletes only those estimates that have a job status of Closed. If an estimate has any other job status, QuickBooks retains the estimate.

QuickBooks deletes time data if it’s marked as "billed" or "not billable," or if its job status is Closed. If you base your payroll on time data, you must also have paid your employees for the time. For example, if you billed your customer for the time but you haven’t paid your employees yet, QuickBooks doesn’t delete the time data.

See also

KB ID# H_FILE_HOW_QB_CLEANUP_DATA
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