Everyone knows the importance of backing up your financial data (such as your QuickBooks company file), but how many of us remember to do it? Every business should have a solid backup plan for its business files, but all too often the small business fails to do this. I’ve heard all the excuses (sometimes in my own office): It is a hassle to set up, it slows down the computer, I thought I did it but I forgot…

Starting with QuickBooks 2011 R6 and QuickBooks 2010 R12, Intuit has implemented QuickBooks Auto Data Recovery, a feature that will automatically make a local backup copy of your company file for you. At this time this feature is only available in Pro and Premier, not in QuickBooks Enterprise or QuickBooks Premier Accountant’s Edition.

If you have one of the supported versions of QuickBooks you may see an additional folder show up on your computer, with a few new files. This is the QuickBooks Auto Data Recovery folder, and it will show up on its own.

This is a backup copy of your QuickBooks company file, and a matching transaction log, which QuickBooks makes for you automatically

Roughly one hour after you open a QuickBooks company file, the QuickBooks Auto Data Recovery feature will perform some internal diagnostics on the file. If the file has been opened and passes the tests, the program assumes that this is a good file and a backup copy is made into the ADR folder.

After the initial copy is made, the ADR transaction log will contain all transactions added to the file from that point on.

Every 12 hours after the first copy is made, QuickBooks will make another copy of the file. This won’t happen if you don’t have QuickBooks open – it occurs the next time you start the desktop program. So now you have two copies, one that is up to 12 hours old, and one that is up to 24 hours old. (Older copies are then deleted.)

How do you restore the backup file? Intuit does not expect customers to do this on their own. The intent is that the backup files are there for Intuit technical support staff to work with as a last resort, one step short of sending the file to Intuit Data Services for repair. If you would like more information about this new feature and how it works (including how to restore the files yourself), see my detailed article on QuickBooks Auto Data Recovery.