Update QuickBooks Company File to Avoid Errors & Data Loss

Maintaining an up-to-date company file in QuickBooks ensures seamless financial operations and helps reduce the risk of discrepancies in your business data. You’ll automatically receive a prompt to update QuickBooks company file if the software assumes the need. However, there are several instances you might be unaware of where the company file requires upgrading to avoid compatibility and other potential issues.

We addressed the problem and created this blog that covers all the important aspects, like why and how to update your company file in QuickBooks. It might seem a dismaying task if you do not take proper precautions and follow the correct procedure but becomes a piece of cake once you read this blog till the very end. Let’s begin!

Why Does this Company File Needs to be Updated?

We have put forward some of the scenarios where you’ll need to update the company file, or you may already receive a prompt ‘this company file needs to be updated’ while accessing your financial data in QuickBooks. Here they are:

After upgrading your QuickBooks version:

In case you switch to a newer QuickBooks version, you’ll have to update company file following upgrade to make it compatible with the new version. Unfortunately, upgraded QuickBooks won’t be able to run the company files from the old QB version. For example, QuickBooks Desktop 2024 won’t be able to run QuickBooks Desktop 2023 company files without an upgrade.

Note: We are talking about QuickBooks version (QB Desktop 2020, QB Desktop 2021 and further) here and not switching between QB Products like Enterprise, pro, premier, etc.

After installing QuickBooks updates:

There’s an exceptional possibility that you might need to update the data file after installing the latest QuickBooks updates. This is unorthodox, but you might encounter a prompt to upgrade your company file once you reboot QuickBooks after installing the updates.

Tip: If you need help with QuickBooks Desktop updates, here’s a comprehensive article on how to update QuickBooks Desktop.

After configuring your financial year settings:

Your QuickBooks might need to update the company file when you configure the fiscal year settings in a company file. This is done to ensure the changes are put into application and the calculation remains tax-compliant when you resume bookkeeping in QuickBooks.

To resolve common company file or QuickBooks runtime issues:

QuickBooks might sometimes notify you to update QuickBooks Desktop company file if it experiences some irregularities or glitches while accessing the data file.

We have highlighted some common circumstances where you may need to update your QB data file. If you received the prompt ‘this company file needs to be updated’ due to any other reason we missed and didn’t cover, do not worry. Updating the QB Desktop company file is completely safe and will only enhance the compatibility & credibility of the file.

The next section of our blog walks you through a straightforward procedure to update company file after QB Desktop upgrade or whatsoever reason.

How to Update Company File from Older Version?  

We have classified the entire procedure of updating QuickBooks company file into simple steps. Thereafter, we have also mentioned some limitations while updating the company file, which you must address after applying the stepwise method as shown below:

Step 1: Prepare your QB Company File for the Update

Apply these steps to the company file that needs to be updated in the original version of QuickBooks:

1. Launch your QuickBooks Desktop and open the company file you want to update.
2. Open the Product Information Window using the F2 key.
   
   
3. Check out the File Information section to know the exact location of your company file.

Important: You must have the company file stored in the local drive of your system for easy access. In case it is stored on the server or portably on a storage device, you must move it to your local hard drive before updating it. You can create a backup file (.qbb) and restore it on your system to move the data file.

Step 2: Update your QB Company File

Here’s a quick way to update your QuickBooks company file:

1. Firstly, ensure that all the users are signed out of your QuickBooks company file.
2. Launch the new (upgraded) version of your QuickBooks Desktop and go to the File menu.
3. Select the Open or Restore company option.
4. Choose Open a company file if the file is in .qbw format (company file) or click Restore a backup copy if the file is in .qbb format (backup file).
5. Tap Next and locate your company file from the list. Use the Browse option to fill in the exact location of your company file you noted from the Product Information window.
6. Select your data file and tap Open.
7. Enter your admin account credentials to sign in to the company file and click Update Now.
8. Wait until QuickBooks finishes.

You can now open a QB file in an updated year version without any issues. You have to repeat this procedure with all your company files individually to ensure they become compatible with the upgraded QuickBooks Desktop version.

Batch Upgrade in QuickBooks Desktop (Time-Saving)

You will be glad to know that you can upgrade multiple company files simultaneously if you are a QuickBooks Accountant or QuickBooks Accountant Enterprise user. The platforms offer a dedicated application called the QuickBooks File Manager that allows you to update multiple clients together. Follow these steps:

1. Click the Batch Upgrade option and select Clients.
2. Select all the company files you want to update and click Upgrade.
3. Tap List Unsuccessful Upgrades to view all the company files that failed to update.

Note: Countries within the United Kingdom (UK) don’t have access to this feature.

Limitations of Updating the QuickBooks Company File

There are also some limitations to updating a QB Desktop company file when switching between QuickBooks products, versions, or editions. We have elaborated all three below:

Troubleshooting QB Company File Update Issues

There are some important reminders that you must carry in your mind when you update QuickBooks 2023 files to the latest version. The QB version may be different, but the instructions are the same for all:

1. Always create a backup of the company file (if not prompted automatically) and store it in a different folder before updating QuickBooks company file to avoid data damage or overwriting.
2. When moving files across various locations or systems, verify that they all are using the same QuickBooks Desktop version and release.
3. In case you switch back to the old QB version, you’ll have to manually re-enter all the new transactions from the upgraded company file to the backup file in the old version. You can use a third-party app for seamless transaction export.
4. If the old QB version has been replaced by the new version during installation, reinstall the old version in a different location on your system to retrieve the pre-conversion data backup.
5. Ensure the company file isn’t hidden (File Explorer > View > Show > Hidden items).
6. Always sign in as an admin user in Windows as well as the QB company file to avoid issues during the update.
7. Check for company file credibility using the QuickBooks File Doctor Tool before and after the update.
8. Make sure the company file doesn’t have any special characters or invalid spaces in its name, and it is stored on your local drive.

Following the procedure and taking precautions as mentioned above will give you a hassle-free experience of updating QuickBooks Desktop file without any interruptions. 

Closure

The blog shares a feasible way you can update QuickBooks company file when upgrading your QB version or to ensure the file’s compatibility with the latest software updates. We hope the blog reduces your business downtime and makes you well-equipped to handle all the technical hiccups that might cross your path while updating QuickBooks company file. Just follow the stepwise procedure and keep the tips in mind to start using an upgraded company file on the new QB version in no time.

FAQs

• Can I update my QuickBooks company file if I don’t have admin access?

Unfortunately, signing in with your Administrator account is a must-do to update your QuickBooks company file. There are several permissions that need to be allotted and restrictions to be bypassed during the company file update that require admin access. Limiting the company file update to admin users also ensures the integrity of your QB company file.

• Can I revert to an older version of QuickBooks after updating my company file?

No, you cannot revert to an older version of QuickBooks as the file update process is irreversible. You can’t open the upgraded company file on the old QB version, and you’ll have to manually enter the new transactions in the pre-conversion backup of your company file.

• How do I update my QuickBooks company file if it’s on a network drive?

You need to move the company file to your system’s local drive before updating it for the new QB version. This is done to provide easy file access to QuickBooks and prevent any connection issues during the update. As of now, you can restore a backup copy on your local drive and upgrade that file for the new QB version. You always have the accessibility to move the company file back to the network drive once it is updated.