QuickBooks Backup Copy vs. QuickBooks Accountant’s Copy

Which type of QuickBooks file should be shared between client and bookkeeper? It is important to understand the difference between the “Backup” copy and the “Accountant’s” copy when sharing bookkeeping data and the advantages/disadvantages of each.

Most QuickBooks users are familiar with the backup copy in QuickBooks and have probably created a backup file for their own purposes. Perhaps they needed to store a copy of their QuickBooks file off-site for security reasons.  Or, maybe they needed to provide a backup copy to their tax preparer at year-end.  

Advantages of a Backup Copy

• Quick and familiar method for the client to get their accounting history to their tax preparer.
• The client may continue to work without restrictions on their end.

Disadvantages of a Backup Copy

• Multiple copies of the QuickBooks file can result in confusion over which copy is the most current.
• Any changes made will need to be tracked by the tax preparer and submitted to the client for manual input into their copy (which in many cases may be overlooked by the client).

In many circumstances, clients will be unfamiliar with the Accountant’s Copy functionality in QuickBooks. This option allows the client to share their file with their tax preparer while continuing to work in their own copy of the file. A Dividing Date separates the historical transactions to be reviewed and edited by the tax preparer from the day-to-day transactions to be entered for ongoing, current activities in the account.

Advantages of an Accountant’s Copy

• Any changes made by the tax preparer are tracked within Quick Books and can be imported to the client through an Accountant’s Changes file.
• The client is restricted from making any changes to their historical data which could affect their financial reports and tax liability.

Disadvantages of an Accountant’s Copy

• The tax preparer must work in the same version of Quick Books as the client in order to create the Accountant’s Changes file.
• The client may require some training to be familiar with the process needed to import changes so that they do not remove the restrictions, resulting in manual entries of changes after the Quick Books file has been reviewed and updated.

Knowing the pros and cons of both options can help you make the right choice. However, in most situations and with the proper training for clients, QuickBooks Accountant’s Copy is one of the most effective ways to adjust a client’s books.

Martha Leonard, Bookkeeper/Tax Preparer, Davis & Hodgdon Associates CPAs

Davis & Hodgdon Associates CPAs is a full-service public accounting firm with locations in Williston and Rutland Vermont. The firm is a member of the Vermont Businesses for Social Responsibility (VBSR), Vermont Business Environmental Partnership (VBEP), Lake Champlain Regional Chamber of Commerce (LCRCC), and Women Business Owners Network (WBON).  The firm serves its clients from their locations in Williston, VT and Rutland, VT by providing progressive, proactive services through expert staff, high-end technology, and unparalleled efficiency.