How Does an Accountant Work With Client Data In an Accountant’s Copy File?

The Accountant’s Copy file in QuickBooks is an easy way for a company to transfer data to a third-party, such as an accountant.  In an article on our blog, we’ve described how a company can easily transfer an Accountant’s Copy export file (.QBX) to us using Intuit’s secure servers.  This file could be delivered via other methods, such as delivery on a flash drive or other physical media.  Intuit uses the terms “export” and “transfer” to describe a .QBX file interchangeably.  For simplicity, we’ll refer to this file as an export file because “eXport” serves as a better reminder of the purpose of the file extension, .QBX.

Throughout this article, we’ll refer to different file types with similar names.  The function of each of these files is very specific.  For more information, see our article describing the different file types in QuickBooks.

Working with an Accountant’s Copy is essentially a 5 step process:

1. client sends an Accountant’s Copy export file (.QBX) to an accountant or third party
2. accountant or third party works with the data
3. an accountant or third party returns completed work to the client
4. client imports changes made by accountant or third party
5. resolving problems if the client import fails

We’ll pick up where our blog article left off: an email has been received advising that a client has sent a file, and it’s ready for download by clicking on a link provided in the email.  Clicking on that link will invoke your default web browser, and prompt you to save the file to a location on your local hard disk.

Click Save and be sure to write down the location you specify.

There are 2 ways to work with an Accountant’s Copy export file (.QBX):

1. Convert it to an Accountant’s Copy working file (.QBA), which allows your changes to be automatically incorporated into the client’s company file, or
2. Convert it to a company file (.QBW), which will not allow your changes to incorporated into the client’s company file

The method you choose depends on your circumstances.  Normally, you’ll want to choose the first method so that you can transmit only your changes to your client, who can then automatically incorporate those changes into his company file.  If you opt to convert the Accountant’s Copy export file (.QBX) to a company file (.QBW), you’ll have to replace your client’s company file.  This choice is only appropriate when the client will not record any transactions whatsoever while you perform you work.  Otherwise, those transactions will be lost when you replace the company file.

Because a company file (.QBW) is the primary file for recording data in QuickBooks for Windows, the file is considerably larger than other file types.  You may find that the size of the company file makes electronic transmission, especially via email, more difficult.  For example, the company file containing the sample data we used in these examples is 7944 Kb, or nearly 8 megabytes, in size.  By comparison, the Accountant’s Copy export file (.QBX) created from this company file to be sent to an accountant is only 328 Kb.  The Accountant’s Copy import file (.QBY) containing our 1 journal entry is less than 2 Kb in size, which is about the space required for 1 transaction.  If we had recorded 100 transactions resulting in a .QBY file of approximately 200 Kb, it would be easier to transmit that file via email than a file containing nearly 8 Mb of data.  The size of the ultimate file to be sent to a client and the ease with which this can be accomplished are very important considerations when choosing how to use a Accountant’s Copy export file.

Method 1 – Convert a .QBX to a .QBA File

This is the preferred method to work with client data because of three principal benefits:

• your client can continue to record transactions in the company file after the dividing date,
• QuickBooks will record only your changes in an Accounant’s Copy import file, resulting in a much smaller file to be transmitted to the client, and
• tools are in place within QuickBooks to easily document changes you made to the file.

From within QuickBooks, click File->Open or Restore Company…, select Convert an Accountant’s Copy Transfer File, and click Next.  Alternately, in some editions of QuickBooks you can accomplish the same thing by clicking File->Accountant’s Copy->Open & Convert Accountants Copy Transfer File to bypass the first screen below.

You’ll see an overview of using the Accountant’s Copy export file.  Click Next two times.  If this task has been performed before and you opted to bypass these informational screens, you won’t see them at this point.

Since the Accountant’s Copy export file (.QBX) was encrypted, you’ll be prompted to enter the password.  This password was entered by the company when it generated the export file.

Once you’ve supplied the correct password, you’ll be prompted to name the Accountant’s Copy working file (.QBA).  This working file, as its name suggests, will record your changes.  Later, when your work is complete, only those changes – not the .QBA file itself – will be transmitted back to the client company.  If you need to close QuickBooks or close this file, you’ll re-open the Accountant’s Copy working file (.QBA) to resume your work for this client.

While you work in an Accountant’s Copy working file (.QBA), your QuickBooks title bar will display that you’re working in an Accountant’s Copy working file and the dividing date entered by the client company when the Accountant’s Copy export file was created.

Method 2 – Convert a .QBX to a .QBW File

This method is not the normal method for an accountant to complete work that will transmitted back to the client and automatically incorporated into the client firm’s company file.  Nevertheless, under certain circumstances this method can provide valuable benefits.  If your client will not record any transactions in QuickBooks and you can easily replace the company file in its entirety, you’ll be able to work on the client’s data without restrictions that apply to Accountant’s Copy files.  Moreover, if your client’s company file has been damaged and more suitable backups do not exist, a .QBX file converted to a .QBW file can sometimes provide an effective replacement for your client’s .QBW file.  Before opting to convert a .QBX to a .QBW, be sure that you have a practical method to replace your client’s company file and that your client will not record any transactions whatsoever.  When you replace the client’s company file with your converted file, all transactions recorded by your client will be lost.

To convert a .QBX to a .QBW file, click the File->Utilties->Convert Accountants Copy to Company File (.QBW)… menu choice.

Because this method should only be employed after close coordination with the client regarding who will be working on the company file, you’ll receive this advisory before continuing:

QuickBooks will proceed to convert the Accountant’s Copy export file (.QBX) to a regular company file.  You can now use it like any other QuickBooks company file.

Whichever method you choose to work with an Accountant’s Copy export file (.QBX), once your work has been completed, you’ll need to transmit it to the client.  If you use an Accountant’s Copy working file (.QBA), QuickBooks users another file type, the Accountant’s Copy import file (.QBY) to send only your changes to the client.  In a separate article, we describe the procedures for creating an Accountant’s Copy import file (.QBY) and sending it to a client, as well as considerations to send and replace a client’s company file.

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