Opening balances

Set up opening balances (10:56)

Opening balances represent the financial position of your company on the day before you start entering transactions. Without accurate opening balances, the reports can’t 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 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 recording transactions from the start 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 this system to use when entering opening balances. This ensures that all 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, 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, vendor, and bank opening balances, and then enter the remaining values from the trial balance 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 the Settings page. From the top navigation bar, click Settings to open this page before following the procedures below.

Enter the Accounts Start Date

  • 1. Under Financial Settings, click Financial Settings.
  • 2. In the Accounts Start Date field, enter the date that you will start recording transactions.
  • 3. Click Save.

Enter your customer opening balances

  • 1. Under Opening Balances, click Customer.
  • 2. Click New Opening Balance and complete the following information:
Customer Select the customer.
Date Enter the date of the invoice or credit note. This must be before the date entered in Financial Settings > Accounts Start Date.
Type To record an invoice, select Bill or 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 If required, enter any additional information, such as what the invoice or credit note was for.
Subtotal Enter the amount of the invoice or credit note.
Tax Ratel Select a tax rate for this customer, if applicable. The Total will update with any taxable amounts.

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

  • 3. If you’ve enabled multi 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 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.
  • 4. Click 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 opening balances, the total amount entered here appears 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 complete the following information:
Vendor Select the required vendor.
Date Enter the date of the invoice or credit note. This must be before the Accounts Start Date.
Type To record an invoice, select Bill or 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 If required, enter any additional information, 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, you should enter these as credit notes which you can then allocate to an invoice at a later date.

  • 3. If you’ve enabled multi 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 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.
  • 4. Click Save. Repeat these steps until you’ve entered all outstanding invoices and credit notes for each of your vendors.

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

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. Under Opening Balances, click Bank.
  • 2. Complete the following information:
  • Indicates a required field.
Bank Account Select the 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 October 1, you should use September 30 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.

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 change the value. If it has been reconciled, 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 the previous step on the next available lines until you’ve entered the opening balances for each of your bank accounts.

If you have 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 ledger accounts.

Enter your General Ledger opening balances

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

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 for your opening balances.
  • 4. Enter the remainder of your trial balance as follows:
Ledger Account * Select the relevant 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. 5.Repeat these steps until you have 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 have a zero balance. If not, make sure you have entered the correct values for each entry.

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

You’ve successfully entered your opening balances and the values appear on 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 the delete button 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.

If you change your opening balances, and this results in a difference between the debits and credits in the General Ledger Opening Balances option, the difference posts to Opening Balances Control Account (9100). 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, update any as required and check the balance on ledger account 9100 is zero.