The Opening Balance allows you to establish the accounting statement at the beginning of using the software. If this is not your first accounting year, and if you had an accounting system in another tool, setting up the opening Balance allows you not to start from scratch.
To do this, you will be asked to enter the state of your accounting before using the software: the bank balance, the cash balance, etc.
This article covers the following points:
Where to set up the opening balance?
To set up your opening balance, follow the steps below:
1. Go to Accounting > Closing
2. Click on View in the opening Balance section.
Setting up the opening balance
On what date should the opening Balance be recorded?
As a general rule, it is best to enter the opening Balance and the state of your accounting on the date of your last accounting closing in your old tool. This allows you to indicate in the software the state of your accounts at the beginning of the new fiscal year and, therefore, not start from scratch.
If you do not have any documents at this date, you can make a balance at the end of the month in your old tool and start from this date in the software. If you have any doubts, please ask a chartered accountant.
The opening Balance generates opening balances for the accounts that have been entered. These balances appear in your documents on the start date of the first fiscal year.
If your 1st fiscal year starts on 01/01/2022, you will find your beginning balances in the trial balance.
What information should you enter?
Fill in the status of all your accounting accounts before using the software.
You are using the accounting application for your new fiscal year starting January 1, 2022. So, it is necessary to fill in the status of your accounting accounts as of December 31, 2021. Indeed, some of your accounts are in credit or debit.
All accounts from classes 1 to 5 that have non-zero balances must be filled in the opening Balance.
As a general rule, the accounts to be filled in are the following:
-
Bank accounts (Cash in the Bank)
My main bank account has a positive balance of $2000 -
Cash in hand
I have $300 in petty cash -
Debts and receivables
I have this customer or person who owes me money -
Checks
I have checks that have not yet been cashed, or I have received checks that I have not yet deposited in the Bank
The expenditure and income accounts (classes 6 and 7) do not appear in the opening Balance, as they are balanced and zero at the end of the year. The result (class 1 account) can, however, be entered.
How to record them
To enter the status of your accounts in the opening Balance, click on the different blue buttons above your Balance.
A block appears, then fill in all the information requested. To fill in your bank account amount on 12/31/2021, click on Bank, then fill in the Balance.
Click on Add. The account has been added to your opening balance. Then repeat for all your accounts and save the page before exiting.
You can do this for all the following accounts:
Explanation of accounts:
- Bank Amount: you had in Bank as of 31/12 of the previous accounting year.
- Petty Cash: Amount you had as petty cash as of 31/12 of the previous accounting year.
-
Checks: This option is helpful for your bank reconciliation process. It may happen that signed checks have not yet been cashed out. These must be recorded.
In the same way, you can record checks received before 31/12 but which have not yet been deposited in the Bank. - Debt Recording: your debt details will enable you to do a proper follow-up.
- Receivable: A receivable is the opposite of debt: An amount you should receive. Recording your receivables details will enable you to do a proper follow-up.
- Book-entry: This option enables you to record a balance carry-forward as an accountant would by specifying the account number.
Balance carry-forward
As explained in the article on closing, there are two types of accounts for managing a surplus/deficit result:
- The result of the previous year (120/129).
- The accumulated results of all the years are called retained earnings (110/119).
The software automatically calculates the Balance carry forward (110/119) by deducting the missing amount to balance liabilities and assets. You also do not need to enter an appropriation of the previous year's result (120/129) on account of retained earnings (110/119).
If you enter the N-1 result (120/129), you must enter an appropriation entry in the Journal book entry.
If the amount of retained earnings is incorrect, there is a problem with the other entries made on the opening Balance (wrong amount, missing entry, etc.).
The first financial year is open
Your opening balance is accessible as long as your first fiscal year in the software is not closed. So, you have until the closing date to finalize its entry if you wish.
To modify an entry, cancel it by clicking on the yellow cross, then you can re-enter it.
The first fiscal year is closed
Once your first fiscal year is closed, the trial balance can no longer be modified, as it defines the beginning balances of the fiscal year on which the software bases the closing.
If you wish to modify the opening balance after the fiscal year is closed, you will have to cancel the closing.
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