Opening balances

Whether you’re just starting your business or changing from another accounting system, you’re likely to have opening balances. Without accurate opening balances, the reports produced by Sage One can’t give you a true picture of your financial position.

In Sage One Accounting you can enter opening balances for:

  • Outstanding customer transactions
  • Outstanding supplier transactions
  • Bank accounts
  • Your nominal ledger trial balance

In order to enter your opening balances you need a list of your outstanding customer and supplier invoices and credit notes, your closing trial balance from your previous accounting period and your bank statements. You also need a list of your unrepresented bank items from your previous accounting system. Unrepresented items are bank transactions you’ve entered in your previous system but have yet to appear on your bank statement, for example, uncleared cheques.

We recommend you start using Sage One from the start of a new accounting period, whether this is a new tax month or quarter or the start of your financial year. You should also complete your final VAT Return using your previous system. You can then produce your final trial balance from this system to use when entering opening balances. This ensures that all the values you enter in Sage One are accurate and have been reconciled.

You can enter all of your opening balances at once, or you can enter them at different times. For example, if your accountant previously processed your accounts for you, they may not have sent you your full trial balance yet. You can still enter your customer, supplier and bank opening balances and then enter the remaining values from the trial balance at a later date.

If required, you can import your customer and supplier opening balances. Alternatively, to manually enter them, you can follow the steps in this article.

Before entering opening balances, you need to create your customer, supplier 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.

Check your VAT scheme and start date

Before you enter your opening balances, you need to check you’ve entered your VAT scheme and the start date for your Sage One transactions.

  • 1. Settings tab > Accounting Dates & VAT.
  • 2. Accounts Start Date > enter the day you intend to start using Sage One from. For example, if you stopped using your previous accounting system on 30 September, enter 1 October.

You can’t enter any transactions before this date, only opening balances.

  • 3. VAT Scheme > choose the relevant VAT scheme > Save.

If you use the VAT Cash Accounting scheme, you pay VAT on your sales when your customers pay you, and reclaim VAT on your purchases when you have paid your supplier.

In Sage One VAT amounts are posted to VAT holding accounts until the payment is received or made. Once paid the VAT amounts show in the VAT on Sales, or VAT on Purchases ledger accounts.

You’re now ready to start entering your opening balances.

Enter your customer opening balances

  • 1. Settings > Opening Balances > Customer.
  • 2. Check the accounts start date is correct. If it isn’t, click the date > change it as required > Save.
  • 3. New Opening Balance > complete the following information:
Type To record an invoice, choose Inv or to record a credit note, choose Crn.
Date Enter the date of the invoice or credit note. This must be before the date entered in Financial Settings > Accounts Start Date.
Customer Choose the required customer.
Reference Enter a reference for the opening balance, for example the invoice or credit note number.
Details If required, enter any additional information, such as what the invoice or credit note was for.
Net This option only appears if you use the VAT Cash Accounting scheme. Enter the net value of the transaction.
VAT Rate This option only appears if you use the VAT Cash Accounting scheme. Choose the appropriate VAT Rate.
Total If you use the Standard or Flat rate VAT scheme, enter the gross value of the invoice or credit note. If you use the VAT Cash Accounting scheme, this value automatically calculates from the net amount and VAT rate.

If you’ve any outstanding payments on account, you should enter these as credit notes which you can then allocate to an invoice at a later date.

  • 4. If you’ve enabled multi currency transactions, and the customer is based overseas, 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 required, 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. Save > repeat these steps until you’ve entered all outstanding invoices and credit notes for each of your customers.

You’ve successfully entered your customer opening balances. When you enter your nominal opening balances, the total amount entered here appears on the Trade Debtors control account and the opposite entry is posted to the Opening Balances Control Account.

If you use the Standard or Flat rate invoice based VAT scheme, VAT should already have been accounted for on the final VAT Return you produced from your previous system, therefore no values are posted to the VAT on Sales nominal ledger account.

If you use the VAT Cash Accounting or Flat rate cash based VAT scheme scheme, VAT is calculated when the customer pays the invoice. As the VAT hasn’t yet been accounted for, it’s posted to the VAT on Sales Holding Account nominal account until payment is received.

To pay an opening balance invoice you would need record a customer receipt in Banking.

Enter your supplier opening balances

  • 1. Settings tab > Opening Balances > Supplier.
  • 2. Check the accounts start date is correct. If it isn’t, click the date > change it as required > Save.
  • 3. New Opening Balance > complete the following information > Save.
Type To record an invoice, choose Inv or to record a credit note, choose Crn.
Date Enter the date of the invoice or credit note. This must be before the date entered in Financial Settings > Accounts Start Date.
Supplier Choose the required supplier.
Reference Enter a reference for the opening balance, for example the invoice or credit note number.
Details If required, enter any additional information, such as what the invoice or credit note was for.
Net This option only appears if you use the VAT Cash Accounting scheme. Enter the net value of the transaction.
VAT Rate This option only appears if you use the VAT Cash Accounting scheme. Choose the appropriate VAT Rate.
Total If you use the Standard or Flat Rate VAT scheme, enter the gross value of the invoice or credit note. If you use the VAT Cash Accounting scheme, this value automatically calculates from the net amount and VAT rate.

If you’ve any outstanding payments on account, you should enter these as credit notes which you can then allocate to an invoice at a later date.

  • 4. If you’ve enabled multi currency transactions, and the supplier is based overseas, enter the following information:
Total (currency symbol) Enter the amount in the supplier’s base currency, for example, US dollars.
Exchange rate If you use live exchange rates, this is the latest rate. If required, 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. Save > repeat these steps until you’ve entered all outstanding invoices and credit notes for each of your suppliers.

You’ve successfully entered your supplier opening balances. When you enter your nominal opening balances, the total amount entered here appears on the Trade Creditors control account and the opposite entry is posted to the Opening Balances Control Account.

If you use the Standard or Flat rate invoice based VAT scheme, VAT should already have been accounted for on the final VAT Return you produced from your previous system, therefore no values are posted to the VAT on Purchases nominal ledger account.

If you use the VAT Cash Accounting or Flat rate cash based VAT scheme scheme, VAT calculates when you pay the invoice. As the VAT hasn’t yet been accounted for, it posts to the VAT on Purchases Holding Account nominal account until you record the payment.

To pay an opening balance invoice you would need record a supplier payment in Banking.

Enter your bank opening balances

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

  • 1. Settings tab > Opening Balances > Bank.
  • 2. Complete the following information:
Bank Account Choose the relevant bank account. The sort code and account number for the account appear and you can’t change them. If you need to change them, you can do so from the Banking option.
Date * Bank opening balances should be dated before the date entered in Accounts Start Date. For example, if the start date is 1 October, you should use 30 September as for the opening balance date.
Type * Choose whether the balance is a debit or credit value.
Opening Balance * Enter your total bank account balance from your bank statement as at the date used for your opening balance.

* These details are compulsory.

If you’ve already entered opening balances for your bank accounts, they appear here. Provided the opening balance hasn’t been bank reconciled, you can amend the value. If it has been reconciled, and you need to amend 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 the previous step on the next available lines until you’ve entered the opening balances for each of your bank accounts.

If you’ve bank items entered in your previous system but have yet to clear your bank account, so that you can reconcile these once the appear on your statement, you should record these here on separate lines, using the date of the original transaction.

  • 4. Click Save.

You’ve now entered your bank opening balances which appear on your bank records and the relevant nominal codes.

Enter your nominal opening balances

  • 1. Settings tab > Opening Balances > Nominal Ledger.
  • 2. Check the date for your opening balances.

This defaults to the date immediately prior to the one you entered in Accounts Start Date. You shouldn’t change this.

  • 3. Enter a reference of your choice for your opening balances.

If you’ve already entered your customer, supplier and bank opening balances, the values automatically appear. If necessary, you can amend these values by clicking the relevant line and following the steps in the relevant sections above.

  • 4. Enter the remainder of your trial balance as follows:
Ledger Account* Choose the relevant nominal ledger account you want to record the opening balance for.
Details If required, enter any additional details.
Debit If the trial balance shows a debit value, enter this here.
Credit If the trial balance shows a credit balance, enter this here.
  • 5. Repeat the previous step on the next available line until you’ve entered all values from your trial balance.

As you enter your trial balance, to ensure the total debits and credits balance, the opposite entry posts to the Opening Balances Control Account. Once you’ve entered all the values from your trial balance, this account should be zero. If it isn’t, check you’ve entered the correct values for each entry.

If necessary, you can save your opening balances without entering the full trial balance and Sage One retains the values you enter here. A value remains in the Opening Balances Control Account until you can enter the full trial balance.

  • 6. Check the opening balances entered match those on your trial balance > Save.

You’ve successfully entered your opening balances and the values appear on the relevant nominal accounts.

If you’ve opening balances in your VAT on Sales or VAT on Purchases ledger account that haven’t yet been included on a VAT Return, Sage One can’t automatically include them on a return. Instead, you need to manually adjust your VAT Return, then post a journal to clear these values.

To edit or delete an opening balance

  • 1. Settings tab > click the type of opening balance you want to edit or delete.
  • 2. Do one of the following:
  • To delete the opening balance, click the delete button > if prompted to confirm you want to delete the transaction > Yes.
  • To edit a customer or supplier opening balance, click the relevant line > amend the details as required > Save.
  • To edit a bank or nominal opening balance > amend the relevant line as required > Save.

If you amend your opening balances, and this results in a difference between the debits and credits in the Nominal Opening Balances option, the difference posts to Opening Balances Control Account (9998). You should check the value for each item matches the values on the trial balance you’re using to enter your opening balances. If they don’t, before saving your opening balances, amend any as required and check the balance on ledger account 9998 is zero.

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