A guide how to set up opening balances in Quickbooks online

Either before you start using Quickbooks or shortly after you have been using for a while you will need to enter your opening balances onto Quickbooks. If you dont then your accounting wont be accurate.

When to enter opening balances into Quickbooks

You can do this at any suitable point, but whatever date you choose it must be the same for everything. E.G. its no good entering your opening bank figure at 31st December and your opening Debtors as at 31st January. All balances must be as of the same date.

A good time would be the year end of the company or a VAT quarter end or failing that month end.

All figures should be entered on the last day of the month not the first day of the following month.

What information do you need to enter your opening balances on Quickbooks. ?

To enter the opening balances you will need a Trial Balance (TB) from your previous accounting system or statutory accounts. In addition you will need a schedule of your Debtors and a schedule of Creditors.

If you decide to do so part way through a VAT quarter( not recommended) you will also need a print of the VAT return for the one or two months prior to starting Quickbooks.

What if some information is not available or they are only draft figures ?

If some information is not yet available or you are waiting for figures to be finalised then you can enter draft provisional figures and amend them later.

If no figures at all are available you can start processing your data in Quickbooks but realise your accounting will not be accurate until the figures are entered In Quickbooks opening balances can be entered at a later date.

Auto Bank Feed already switched on- how it affects opening balances in Quickbooks

If you have switched on the auto bank feed in Quickbooks this would have created an opening journal at a random date. This entry being debit bank credit opening balances account (If money in bank or other way round if the bank account was overdrawn).

This entry will need to be reversed using the original date once the opening TB is entered, as otherwise your accounts will be inaccurate and the bank balance incorrect.

Entering Journal

Enter the journal debiting and crediting all the individual accounts on the Trial Balance, when you come to the Debtors and Creditor accounts enter these to accounts you create called Debtors suspence and Creditors Suspence. Ensure you put in the narative of opening balances and the correct year end or quarter end date as otherwise this will effect the accounting.

Entering opening Debtors and Creditors

Enter a separate journal for the debtors and for the creditors each entry being debit debtors with the customer name, and invoice reference. The total credit entry being entered to the Debtor suspence account. This total must be the same as the figure on your trial balance previously entered to the debtors account.

Repeat the process for the Creditors the opposite way round.

If you have already entered some opening debtors and creditors when you have set up the customer and supplier accounts.

By doing this Quickbooks would have created a journal (from an Invoice or bill) which would debit the customer account and credit the opening balance account. Or if a creditor to Credit the supplier account and debit the opening balances account. You will either need to reverse these journals or take account of them when doing your opening debtor and creditor journals do they dont double up.

Need help ?

No problem if your in a mess or cant face this one off set up of Quickbooks opening balances. Contact us and we will be pleased to help. After all it makes sense to outsource this rather than learn it as you wont need to do it again. Once correctly set up and with the right training your accounting will run seamlessly from year to year in Quickbooks without having to set up again.