What does a QuickBooks Condense do?

The Condense Data utility helps streamline your company data file. If you are having performance issues, the Condense Data utility would be a good option to try to improve performance. The QuickBooks file condense process does two things: The QuickBooks Condense command creates a permanent copy of the QuickBooks data file (called an archival copy of the file); the file condense process makes the data file smaller by summarizing many old closed, detailed transactions that use big monster journal entries.
When you decide to decrease the size of your file, you have 3 options:
⦁ Use QuickBooks’ “Clean Up Company Data” feature to condense the past years.
This feature replaces most of the transactions from the previous years by much smaller monthly journal entries. The details on your previous years are gone, but the P&L and balance sheet “should” remain intact. See some disclaimers on this feature below.
⦁ Use QuickBooks’ “Clean Up Company Data” feature to remove ALL transactions.
The same Clean Up feature mentioned above also allows you to create a new company file without any transactions left, but with all your lists of items intact (customers, vendors, etc.). In this scenario, you need to manually recreate the opening balances for all your accounts, starting from a certain date, including open invoices, open bills, inventory, bank accounts, etc. It can be hard work. It’s as if you started with a brand new company file, except that you don’t have to recreate your item lists.
⦁ Start a brand new company file
This is the brute force approach. It requires you to recreate all the opening balances and all your item lists.
Only use this option if:
⦁ Your database has become corrupted and you can’t seem to be able to fix it.
⦁ You have messes carrying over from previous years that would take a lot of work to fix (broken sales tax liability, open invoices that should have been closed a long time ago, etc.)
It doesn’t hurt to try this feature, but proceed with caution: create backups and compare you data before and after. When you create a backup, make sure to rename the backup and save it in a separate Archive folder. This a very important backup because it’s the last version that contains the details of your previous years. You don’t want to lump this with your generic daily or weekly backups. Also, don’t forget to note the password for that archive version. Your passwords of your “live” QuickBooks file changes over time and you want to make sure that you can reopen that archive file a few years down the road in case you have an audit, for instance.

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