How to add opening balance in QuickBooks

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On the creation of a New account on QuickBooks, you will have to select a day to get a record of your transactions. Hence, it is essential to take in the input of your account balance for the same date. QuickBooks Services give more power to your small, medium or large-sized business. You can easily track your daily transactions, make and send invoices, tally your finances, track your inflow and outflow etc. The opening balance is the key to all the account transactions. There are certain steps to be followed as described below:

Entering an Opening Balance for Bank/Credit Card accounts:

Users can enter the opening balance for a new account as well as an old account.

  • Bank statements or signing in to your bank’s net banking portal would be a perfect start.
  • Log in to QuickBooks desktop. Head your mouse to the Company menu and select the Chart of Accounts tab.
  • Right-click will open many options in the Chart of Accounts. Select New.
  • Select Bank/Credit Card account that has to be added and press continue.
  • Give your account a new name. If you have multiple accounts with the same name, you can try using some unique character or keyword to differentiate between them.
  • Fill in the rest of the details carefully.

Now you will need to select the button named Enter Opening Balance. If you later decide to change this figure, the button will be renamed as Change Opening Balance. The figure that is being entered in this field will be dependent on how you will manage the previous transactions. Two use cases arise here:

  • If you want to enter old transactions that are before the opening balance date: You will need to choose the last transaction date and amount balance from your statement of the account. Now click on OK and your old transactions will be summarized. Henceforth, new transactions will now be recorded in QuickBooks.
  • If you wish to be specific about past transactions: Remember that the opening balance will be the key to a summary of transactions before that date. Hence, we must be very cautious and pick a date that is older than the Opening balance date and time for which you wish records to be entered. Now enter the end date in the corresponding field and the End date balance, enter the account balance as per your bank account statement. Check everything and click on OK. The method helps remove any duplicate old transactions.
  • After all the above steps, Save and Close the session.

How to handle Pending/Outstanding payments:

Asset and Liabilities: The user can enter the opening balance for a new account as well as an old account.

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One has to be pretty careful while handling opening balance in your balance sheet as it includes a set of Equity, Long-term Liability, Other Current Asset, Fixed Asset, Other Assets, and Other Current Liability accounts. The steps include the following:

  • Bank statements or signing in to your bank’s net banking portal would be a perfect start.
  • Log in to QuickBooks desktop tax Form. Head your mouse to the Company menu and select the Chart of Accounts tab.
  • Right-click will open many options in the Chart of Accounts. Select New.
  • Select Loan, Equity, or fixed asset. For other types of accounts, the Other Account Types drop-down is available where you can select the account type you want and hit Continue.
  • Give your account a new name. If you have multiple accounts with the same name, you can try using some unique character or keyword to differentiate between them.
  • Fill in the rest of the details carefully.
  • Now you will need to select the button named Enter Opening Balance. If you later decide to change this figure, the button will be renamed as Change Opening Balance.

The figure that is being entered in this field will be dependent on how you will manage the previous transactions. Two use cases arise here:

  • If you want to enter old transactions that are before the opening balance date: You will need to choose the last transaction date and amount balance from your statement of the account. Now click on OK and your old transactions will be summarized. Henceforth, new transactions will now be recorded in QuickBooks.
  • If you wish to be specific about past transactions: Remember that the opening balance will be the key to a summary of transactions before that date. Hence, we must be very cautious and pick a date that is older than the Opening balance date and time for which you wish records to be entered. Now, enter the end date in the corresponding field and the End date balance, enter the account balance as per your bank account statement. Check everything and click on OK. The method helps remove any duplicate old transactions.
  • After all the above steps, Save and Close the session.

Conclusion:

An alternative to this scenario would be to create a journal entry for opening balance. Opening balance the first entry-amount when either a new business is starting up or a financial year ends and the new one begins. An operating business has a closing balance at the end of the financial year that balance is carried forward as the opening balance for its new financial period. This holds a lot of importance for a business as this amount will also provide you the profits and losses that you made during a financial year.

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