Learn how to enter and manage an opening balance for bank, credit card, and other types of accounts.
To keep accurate financial records, you need to have an organized and accurate chart of accounts. An important part of this is to make sure any accounts that affect your Balance Sheet have an opening balance. This gives you a record of where the account started from.
We’ll help you understand the reason accounts have opening balances and show you how to enter and manage them.
Your accounts in QuickBooks need to match the real-life bank and credit card accounts you're tracking. When you create a new account in QuickBooks, you pick a day to start tracking transactions. Then, you enter the balance of your real-life bank account for whatever day you choose. This amount and start date set the account's opening balance.
Pick an easy date to start your opening balance. If you just opened a new account at your bank, use the day you opened the account. If you've had the account for a while, start your opening balance on the same day as the beginning of your next bank statement. Whatever date you choose, use your bank statement to get the account's balance for that day.
Tip: QuickBooks tracks all of your opening balances for all of your accounts in an Opening Balance Equity account. This makes it easy to go back and look at what you entered later on.
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Enter an opening balance
If you connect your bank and credit card accounts, QuickBooks automatically downloads your historical transactions up to a certain date. It totals them up and enters the opening balance and date for you. If you don't plan to connect your account, you can manually enter the opening balance. Here’s how:
Make sure you know the amount you need to enter for your opening balance.
In the open balances section, pick the date you want to start tracking your finances from.
Then, enter the account balance for that date.
Select Save.
You can now start tracking new transactions in QuickBooks that come after the opening balance date. If you skipped opening an opening balance and have already been tracking transactions, here’s how to enter an opening balance later on.
Edit an opening balance
If you need to add transactions that are older than the opening balance, you need to edit the start date and balance. This sets a new starting point and prevents QuickBooks from counting transactions twice.
Go to Settings ⚙ and select Chart of accounts.
Locate the account and select View register.
Find the opening balance entry. Tip: Sort the date column to show the oldest entries first.
Select the opening balance entry.
Edit the date, then the amount. If needed, select Edit to make your changes.
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.
Go to the Company menu and select Make General Journal Entries. Set the date for the journal entry. It should be the date you pick for the opening balance. On the first line, from the Account drop-down, select the account you're entering the opening balance for.
The journal entry is recorded at the beginning of an accounting period for opening the books of accounts. It supports bringing forth the balances in the ledger accounts and is called the opening entry. The opening entry for the ledger account is based on the opening balance sheet.
The debit or credit balance of a ledger account brought forward from the old accounting period to the new accounting period is called opening balance. This will be the first entry in a ledger account at the beginning of an accounting period.
When the opening balance does not match the bank statement, there are two common reasons: There are previously reconciled transactions which were deleted OR. A transaction which was previously reconciled was unreconciled.
If the difference is zero, you've successfully reconciled your account. If the difference is not zero, you may need to review your transactions again to find any discrepancies.
To get started, click on the cog wheel icon on top of your dashboard and then select Chart of accounts. Click New and set up your account. In the open balances section, choose the date from which you want to start tracking your finances. Then, enter the account balance for that specific date.
With the reconciled balances from your old journal, you can record the opening entry in the new general ledger journal. The opening balances will serve as the beginning balance for each account. Transactions in the current accounting period will increase or decrease these balances, depending on the type of transaction.
Accounts Receivable: In the first row in the Name field, select the customers who owe you money. Enter the opening balance as a debit if you want to increase the balance. Or enter the opening balance as a credit if you want to decrease the balance. Then, enter the same amount in the opposite column in the second row.
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