For growing your business and easily maintenance, small business owners use QuickBooks accounting software. If you are opening a balance in QuickBooks Online Account and add the bank account to transfer the money to the employee, vendors & customers, and any other personnel related to the business so you need to create an opening balance before starting the QuickBooks. Later on, it would be difficult for you to make changes so make sure you fill in the correct data and do it correctly.
Enter QuickBooks Opening Balance
Bank or Credit Card Accounts
- Open the company menu and press on charts of accounts.
- In Chart Account Windows, right snap anywhere and press yes.
- Now, Select a bank or credit card for the account type.
- In Add New Account screen:
- Filled out every required field.
- Enter the Opening Balance Catch.
- When the account is open, then you open the Enter Opening Balance and one transaction can be entered.
- When you entered one transaction is entered then the opening balance option you will see change opening balance.
- Before you enter the start date in QuickBooks, then you have to enter the ending date and ending balance from the last bank statement you received.
- Press OK
- Press Save and Close.
Here, If you got an understanding transaction on the credit cards or in the bank, you have to QuickBooks account for them in order for your accurate reconciliation in the future.
After Entering the Opening Balance in QuickBooks
- From the last bank statement, you can take the ending balance.
- By any outstanding checks, an amount can be increased.
- By any outstanding deposits, the amount can be decreased.
- You can enter a journal entry crediting opening balance equity and debiting the bank or credit card account.
- Choose and make the journal entries from the company menu.
- Enter the number and date for a journal entry.
- From the account column and in the debit column, select the bank or credit card account and enter the amount calculated in step 2.
- Click on the Account option and to the drop-down menu, select the option Opening Balance Equity, from the credit column, enter the amount calculated in step 2.
- Using the QuickBooks Opening Balance Equity as the expense/income account, enter the outstanding transactions by checks or deposits. These transactions would be available for reconciliation without impacting and the prior period balance sheet.
- Reconcile this opening journal entry for each account refers to 6950 for detailed steps to using the process mini reconciliation.
Another Balance Sheet Accounts
Balance sheet accounts integrating the many business tools, equipment, long term liabilities & current term liabilities like credit cards and, loan, and assets such as fixed assets, other current assets, other assets and equity which represent the health of your business. The possibilities of creating a receivable and account payable entry opening balance in QB are treated differently in QuickBooks. You can view the customer and vendor section in this blog on how to set it up.
Using the Chart of Accounts
- From the company menu, select the chart of account.
- Right-click anywhere and open the menu and choose the new, in the chart of the accounts window.
- Now you select the appropriate account type.
- In the Add New Account Screen:
- You can fill the all required filed,
- After that, choose the enter opening balance button.
- Enter the amount of the opening balance and the date. Keep the date before your QB start date.
- Press OK.
- Press Save & Close the sheet.
Using a Journal Entry
- From the company menu, select and make the General Journal Entry.
- For the journal entry, Firstly set the date then enter a number.
- Select the account and you can easily create an account and enter from the account column that you may create the trial balance and balance sheet.
- In the appropriate column, enter a positive amount in the account balance depending on the type of account.
- For the assets accounts, the positive balance appears in the debit column.
- For Equity & Liability, the positive balance appears in the credit column.
- Repeat steps 3 & 4 for every account.
- When the debit card and credit card must be equal then you all balance is entered. Now, you can use the opening balance equity account as the offset for the difference between the two-column.
- Then, click save & close.
- In the first journal entry not included the sales tax payable journal entries, account payable, account receivable.
- To distribute the remaining balance to pass final journal entry in the opening balance equity account to the other equity account and save earnings as appropriate.
Using the Register
You have to go to the account register to enter the opening balance if the transaction is already in your account.
- From the company menu, select the chart of accounts.
- Choose the account and enter the opening balance and then choose to register from the Edit drop-down list.
- For the new transaction complete the fields as follows:
- Date: Opening balance date.
- Number/Type: Leave blank.
- Payee: (Optional) Opening balance type.
- Account: Choose Opening Balance Equity.
- Payment or Deposit: Enter the positive amount in the deposit field and a negative amount in the payment field.
- Click the record.
Income and Expense accounts
For these accounts come from transactions you enter such as checks, bills or invoices as the balances there is no option to enter an opening balance for income and expense accounts.
Customers and Vendors(A/R and A/P)
If there is any customer or vendor remaining the balance before the start date, so the customer following these options to record the balance.
Option 1:
In the opening balance field, you can enter the outstanding balance as the starting date so the opening balance can be tracked on the uncategorized Expense (vendors) and Uncategorized Income (customers). If you set up a job for customers, enter opening balances instead of individual jobs and the customer name will reflect the total balance for all its jobs. When you add the new vendors or customers the opening balance field will be available.
Option 2:
To create opening balances for customers and vendors to create an option Opening Balance and use the option invoices and bills. You use this option helps to determine which account entries you want to track.
Option 3:
For each customer and vendor, enter an individual bill or unpaid invoice instead of a total balance. Then the transaction will display in an open balance for vendors and customers, which is unpaid. And this balance is store and display in A/R and A/P opening balances.
For a transaction that occurred after your start date
- Sales Receipts
- Invoice
- Customer Payments
- Customer Returns
- Deposits
- Sales tax payments
- Vendor bills
- Vendor Credits
- Bill Payments
How to Editing in the Opening Balance
Bank, Credit Card, and another balance sheet accounts
- From the lists menu, select charts of accounts.
- When you need to edit double click the account with the opening balance.
- From the registered account, find the opening balance. In the accounting field, It usually the first transaction and has opening balance equity.
- It is necessary to edit the date and amount.
- Click on the record and save the changes.
Income or Expense Accounts
- From the lists menu, select the chart of accounts.
- When you want to edit double click on the expense or income account.
- Change the date and to your start date in the account quick report. If you are unsure of the start date, transactions, which are typically among your first transactions, select all in the Dates drop-down and then search the report for the correct.
- Over a transaction float the mouse until a magnifying glass appears then double click to QuickZoom the transaction.
- Remember that a General Journal Entry transaction wants total debits equal total credits If any changes affect a journal entry.
- Click Ok.
How to delete Opening Balance Equity
- Click on the toggle bar and select the chart of accounts.
- Choose the account and click view the register.
- Refresh and then click to the icon on the drop-down arrow and get to fill in the opening balance.
- Click on the apply.
- After that click edit.
- Get the more deposit transaction screen and click on the more and then delete it.
- Click on the confirm.
Conclusion
The amount of money in a company account at the beginning of a new financial period is known as the opening balance. It is the first entry of the accounts, here we explain steps on how to editing the opening balance equity and how to enter an opening balance in QuickBooks we are discussing above.