About opening balances

Opening balances represent the financial position of your company on the day before you start using ProductName2. Without accurate opening balances, reports cannot give you a true picture of your financial position.

You can enter opening balances for:

• 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 ProductName2 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.

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.

Verify your start date

Before you enter opening balances, make sure you’ve entered the start date for your transactions.

1. Click More, Business settings.
2. Under Financial Settings, click Fiscal year.
3. In the Accounts Start Date field, enter the day that you will start using ProductName2. For example, if you stopped using your previous accounting system on September 30, enter October 1.

Note: You cannot enter any transactions before this date, only opening balances.

4. Click Save.

You are now ready to start entering your opening balances.

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:

• Category. Select an account.
• 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.
• To edit an opening balance, change the applicable line as required, and then click Save.