About opening balances

Opening balances represent the financial position of your company on the day before you start using Accounting. Without accurate opening balances, reports cannot give you a true picture of your financial position.

You can enter opening balances for:

• Outstanding customer transactions
• Outstanding vendor transactions
• Bank account balances
• General ledger trial balance values

To enter your opening balances, you need a list of your outstanding customer and vendor invoices and credit notes, your closing trial balance from your previous accounting period, and your bank statements. You also need a list of the unrepresented bank items from your previous accounting system. Unrepresented items are bank transactions that were entered in your previous system but have not appeared on your bank statement, such as uncleared checks.

We recommend that you start using Accounting at the beginning of a new accounting period, whether this is a new tax month or quarter, or the start of your fiscal year. You can then produce your final trial balance from your prior system to use when entering opening balances. This ensures that all of the values you enter are accurate and have been reconciled.

You can enter all of your opening balances at once or at different times. For example, you can enter your customer, vendor, and bank account opening balances now, and then enter the opening balances for the remaining general ledger accounts at a later date.

If you are moving from another system, you can import your customer and vendor opening balances.

Before entering opening balances, you need to create your customer, vendor, and bank account records, including loan accounts and credit cards. You can also enter opening balances for your bank accounts when you create the records.

Working with opening balances

You enter and manage all opening balances from Settings, Business settings.

Enter the Accounts Start Date

Before entering opening balances, you must enter your accounts start date, which should be the day that you start using Accounting. Entering opening balances is the only activity that can be dated prior to the accounts start date.

1. Select Financial settings.
2. In the Accounts Start Date field, enter the date that you will start using Accounting.
3. Click Save.

Enter your customer opening balances

1. Under Opening Balances, click Customer.
2. Click New Opening Balance, and enter the following information:

• Customer. Select the customer.
• Date. Enter the date of the invoice or credit note. This date must be earlier than the accounts start date.
• Type. To record an invoice, select Bill. To record a credit note, select Cr Note.
• Reference. Enter a reference for the opening balance, such as the invoice or credit note number.
• Details. Enter any additional information as needed, such as what the invoice or credit note was for.
• Subtotal. Enter the amount of the invoice or credit note.
• Tax Rate. Select a tax rate for this customer, if applicable. The total will be updated with any taxable amounts.

3. If you have any outstanding payments on account, enter these as credit notes. You can then allocate the credit notes to an invoice at a later date.
4. If you have enabled foreign currency transactions, and the customer is based in another country, enter the following information:

• Total (currency symbol). Enter the amount in the customer’s base currency, for example, US dollars.
• Exchange rate. If you use live exchange rates, this is the latest rate. If needed, change this to the rate used for the original transaction. The total value in your base currency automatically updates based on the foreign value and the exchange rate.

5. Click Save. Repeat these steps to enter all outstanding invoices and credit notes for each of your customers.

The total amount you entered displays on the Sales Ledger control account and the opposite entry is posted to the Opening Balances control account.

Enter your vendor opening balances

1. Under Opening Balances, click Vendor.
2. Click New Opening Balance and enter the following information:

• Vendor. Select the vendor.
• Date. Enter the date of the invoice or credit note. This date must be earlier than the accounts start date.
• Type. To record an invoice, select Bill. To record a credit note, select Cr Note.
• Reference. Enter a reference for the opening balance, for example, the invoice or credit note number.
• Details. Enter additional information as needed, such as what the invoice or credit note was for.
• Total. Enter the amount of the invoice or credit note. If you have any outstanding payments on account, enter them as credit notes, which you can then allocate to an invoice at a later date.

3. If you have enabled foreign currency transactions, and the vendor is based in another country, enter the following information:

• Total (currency symbol). Enter the amount in the vendor's base currency for example, US dollars.
• Exchange rate. If you use live exchange rates, this is the latest rate. If needed, change this to the rate used for the original transaction. The total value in your base currency automatically updates based on the foreign value and the exchange rate.

4. Click Save. Repeat these steps to enter all outstanding invoices and credit notes for each of your vendors.

The total amount entered here appears in the Payables control account, and the opposite entry is posted to the Opening Balances control account.

Enter your bank account opening balances

Note: You can also enter opening balances for your bank accounts when creating new accounts or from within the bank account record.

1. Under Opening Balances, click Bank.
2. Enter the following information.

• Bank Account. Select the bank account. The routing number and account number for the account appear, and you cannot change them. If you need to change them, you can do so from the Banking page.
• Date. Bank opening balances should be dated before the date entered in the Accounts Start Date field. For example, if the start date is October 1, you should use September 30 as the opening balance date.
• Type. Select whether the balance is a debit or credit value.
• Opening Balance. Enter your total bank account balance from your bank statement as of the date used for your opening balance.

Note: If you have already entered opening balances for your bank accounts, they appear here. If you have not reconciled the opening balance, you can change the value. If you have reconciled it and you need to change the amount, you can post the opposite entry for the difference. For example, if you entered a debit value of $5000, but the bank opening balance should actually be $4000, enter a credit for the same bank on the same date for $1000.

3. Repeat these steps until you have entered the opening balances for each of your bank accounts. If you have bank items entered in your previous accounting system that have not cleared your bank account, record them here on separate lines using the date of the original transaction. You can then reconcile them after they appear on your statement.

4. Click Save. Your bank opening balances will display in your bank records and the relevant ledger accounts.

Enter general ledger account opening balances

1. Under Opening Balances, click General Ledger.
2. Verify that the date is correct.

Note: The default date is the day immediately prior to the date entered in the Accounts Start Date field. You should not change this.

3. Enter a reference for your opening balances.
4. Enter the remainder of your trial balance as follows:

• Ledger Account. Select the account for which you are entering an opening balance.
• Details. Enter additional details as needed.
• Debit. If the trial balance shows a debit value, enter it here.
• Credit. If the trial balance shows a credit balance, enter it here.

5. Repeat these steps until you have entered all values from your trial balance. To ensure that the total debits and credits balance, the opposite entry posts to the Opening Balances account. After you have entered all the values from your trial balance, this account should have a zero balance. If not, make sure you have entered the correct values for each entry.

Note: If necessary, you can save your opening balances without entering the full trial balance. A value remains in the Opening Balances account until you can enter the full trial balance.

6. Verify that the opening balances entered match those on your trial balance.
7. Click Save. Your opening balances will display in the relevant ledger accounts.

To edit or delete an opening balance

1. Under Opening Balances, click the type of opening balance you want to edit or delete.
2. Do one of the following:

• Click Delete next to an account to delete it.
• Click the customer or vendor opening balance you want to edit to open the Edit Opening Balance window. Update the details as needed and then click Save.
• Find the line for the bank or general ledge account you want to edit. Edit the fields as needed and then click Save.