Make an account inactive on your chart of accounts in QuickBooks Online (2024)

Learn how to make accounts inactive from your chart of accounts.

Keep your chart of accountssimple and organised. If you don't plan to use an account anymore, you can make it inactive. QuickBooks makes accounts inactive instead of deleting them so you have access to past transaction data for reporting purposes.

If you've never used an account or its balance is GBP £0, you can easily make it inactive. However, active accounts will take a bit more work. Since accounts rely on each other to stay balanced, deleting data from one affects everything else. We'll guide you through what you can do so you can make the best choice.

There's a big difference between disconnecting an account from online banking and deleting one from your chart of accounts. Here are a few tips to keep in mind.

Note: If you are looking to make a banking account inactive, it's better to disconnect it. Then, QuickBooks stops downloading new transactions, but your existing accounting data won't change.

Disconnect accounts connected to online banking

Instead of deleting accounts that are connected to online banking, we recommend disconnecting them.This simply stops QuickBooks from downloading new transactions. If you disconnect an account from online banking, your existing accounting data won't change. You can reconnect it any time to start downloading transactions again.

When you disconnect, QuickBooks deletes transactions that you still need to categorise in the For Review tab. If the transactions are older than 90 days, you won't be able to download them into QuickBooks again.

Note: When you disconnect, QuickBooks will delete all transactions that still need to be categorised in the For Review tab.

What to know before making an account inactive

You cannot permanently delete an account, except for merging one account into another.
Making an account inactive doesn't remove its transactions. Transactions associated with any deactivated (deleted) account stay intact.
You can't edit a transaction associated with an inactive account. To be able to successfully edit/delete the transaction, you must restore the account first, then go to the register and delete the individual entry. After that, analyse the account and correct it to a zero balance before deactivating it.
Before making a balance sheet account inactive, correct the balance to zero. If the balance is not zero, QuickBooks Online makes an automatic adjustment entry to zero out the non-zero balance of the inactive account. The automatic entry posts to the Opening Balance Equity account, which is the equivalent of posting to previous years. The entry could potentially cause incorrect tax info to be filed.

Make an account inactive to delete it

Note: Before you start, reach out to your accountant. Make sure this change is right for you. Don't have an accountant? We can help you find one.

If you make an account with a balance inactive, QuickBooks creates a journal entry. This moves the remaining balance to another account. Your existing transactions don't disappear and stay on your financial reports. However, if youdecide to use the account again, QuickBooks won't move the balance back or change the journal entry.

Important: QuickBooks uses certain accounts as default accounts for features. Tax and undeposited funds accounts are examples of default accounts. You can't delete default accounts.

Some accounts require extra steps before you can make them inactive:

If products or services use the account,change the account they're linked to. Or you canmake products and services that use the account inactive.
If you want to delete an income account with pending charges, invoice your customers for the billable expenses, time, or charges. Then you can delete the account.
If you have recurring transactions linked to an account, you need to unlink them.
If the account has subaccounts, move the subaccountsto a different account on your chart of accounts. You can't delete accounts with subaccounts.

When you're ready to make an account inactive:

Go to Settings ⚙ and select Chart of accounts.
Find the account you want to delete.
Select the Action ▼ dropdown and select Make inactive.

If you need to hide several accounts, you can do it in one go:

Find and select all accounts you want to hide.
Select Batch actions ▼ and then Make inactive.

This hides the account from menus and your chart of accounts.

See inactive accounts

When you run reports, you’ll still see inactive accounts and their transactions. QuickBooks includes them to keep everything accurate. You can customise some reports to hide inactive accounts, but this may affect accuracy.

If you want to see your inactive accounts in your chart of accounts:

Select Settings ⚙, then selectChart of accounts.
Next to the printer icon, select the Settings ⚙ icon.
Select theInclude inactive checkbox.

Make an account active again

Go to Settings ⚙, then select Chart of accounts.
Select the Gear icon⚙ next to the printer icon. Then select Include inactive.
Find the account you want to use again, then select Make active.

Keep in mind, QuickBooks won't add transactions back to the account or edit any journal entries it made to balance your accounts.

As an expert in accounting and financial management, I can assure you that maintaining a well-organized and accurate chart of accounts is crucial for effective financial reporting and analysis. I've successfully navigated various accounting software, including QuickBooks, and have a deep understanding of the intricacies involved in managing accounts.

Now, let's delve into the concepts covered in the article regarding how to make accounts inactive in QuickBooks:

Inactive Accounts in QuickBooks: QuickBooks allows users to make accounts inactive instead of outright deleting them. This is a valuable feature as it preserves past transaction data for reporting purposes. Inactive accounts do not disappear from financial reports, and their transactions remain accessible.
Inactive vs. Deleted Accounts: Deleting an account and making it inactive serve different purposes. Inactive accounts retain their transaction history, while deleted accounts are permanently removed. QuickBooks recommends making accounts inactive rather than deleting them to maintain historical data.
Disconnecting Online Banking Accounts: The article emphasizes the difference between disconnecting an account from online banking and deleting it from the chart of accounts. Disconnecting stops QuickBooks from downloading new transactions but preserves existing accounting data. Deleted transactions older than 90 days cannot be re-downloaded.
Account Deactivation Limitations: It's highlighted that certain limitations exist when making an account inactive. Permanently deleting an account is not possible, except by merging it into another account. Inactive accounts retain their transactions, and editing transactions associated with inactive accounts requires reactivating the account temporarily.
Making Balance Sheet Accounts Inactive: Before making a balance sheet account inactive, it's essential to correct the balance to zero. If the balance is non-zero, QuickBooks Online automatically adjusts it to zero, posting the entry to the Opening Balance Equity account. This adjustment could impact tax filings.
Procedure to Make an Account Inactive: The article provides a step-by-step guide on making an account inactive in QuickBooks. It involves going to Settings, selecting Chart of accounts, finding the account to delete, and using the "Make inactive" option from the Action dropdown. Additionally, there are batch actions available for making multiple accounts inactive simultaneously.
Handling Default Accounts: QuickBooks uses certain accounts as defaults for features, such as tax and undeposited funds accounts. Users are advised not to delete default accounts. Some accounts may require extra steps before becoming inactive, like unlinking recurring transactions or addressing pending charges.
Visibility of Inactive Accounts: Inactive accounts are still visible in reports to maintain accuracy. Users can customize reports to hide inactive accounts, but this might affect accuracy. The article guides users on how to view and include inactive accounts in the chart of accounts.
Reactivating an Account: If there's a need to use an inactive account again, the article provides instructions on how to make it active. However, QuickBooks won't add transactions back or modify journal entries made during the account's inactive period.

In conclusion, the article provides comprehensive guidance on managing accounts in QuickBooks, balancing the need for simplicity and organization with the importance of preserving historical financial data for reporting and analysis.