An introduction to opening balances
Most companies are likely to have opening balances, whether you’re just starting your business or are changing from another accounting system to Sage Business Cloud Accounting. Without accurate opening balances, the reports you produce can’t give you a true picture of your financial position.
Before you start using Sage Business Cloud
We recommend you start using Sage Business Cloud Accounting 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 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.
What do I need to enter my opening balances?
In order to enter your opening balances, you need a list of your outstanding customer and supplier invoices, 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.
How to enter opening balances
Before you enter opening balances in Sage Business Cloud Accounting, you need to check you’ve entered your VAT scheme and the start date for your accounting transactions. You also need to create your customer, supplier and bank account records, including loan accounts and credit cards.
Once you’ve done this, you can enter opening balances for the following:
- Outstanding customer transactions.
- Outstanding supplier transactions.
- Bank accounts.
- Your nominal ledger trial balance.
As an alternative to manually entering your customer and supplier opening balances, you can also import them into Sage Business Cloud Accounting.
If you need to edit or delete an opening balance in Sage Business Cloud Accounting, you can do so easily.