Have you experienced the situation ‘when you already have been tracking QuickBooks transactions, and forget to enter an opening balance.’? Well if you are not experienced with the situation that is good, and if you experienced the situation badly, and that time if you need the support and service from any third party or from Intuit, then its time to solve this issue own self. Yes, in this blog, you can overcome the situation, and can know what will be the next step if you did not enter an opening balance in QuickBooks Online.
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Let’s start the blog:
Important of Opening Balance in QuickBooks Online
Generally, company dependent on opening balance and closing balance. An opening balance is a total amount deposited in the Company’s account at the starting of the new financing year. Business owners used to say this “First entry” because it is done when a company starts or after the ending of the year. In the same way, closing balance is a total amount deposited and collected in the company’s account at the ending of the year.
QuickBooks Online Opening Balance will be inputted automatically at the same time when you are ready to download transactions from your bank’s online Banking system. For changing and modifying the existing opening balances either in QuickBooks Online or QuickBooks Desktop, get help from Chart of Accounts by accessing it within QuickBooks software.
You will get multiple steps and solutions in this article. The main motive of our team is to cover every single piece of information in this article because the missing and wrong interpretation of information will lead to unsatisfactory results.
Did Not Enter an Opening Balance in QuickBooks Online!
Don’t be surprised after finding this situation, just follow the below steps to enter an opening balance in QuickBooks Online.
From the first day, you create a new account in QuickBooks Online, you pick a day as per your choice to start tracking the Business transactions. You have to manually enter the balance of your account for that day so that every transaction can match from the start. This starting point is usually known as the Account’s Opening Balance.
Due to some reason, if you forget to enter Opening Balance at the time of creating the account. Don’t panic, feel free, this issue can easily be fixed by visiting back and creating a journal entry in QuickBooks Online to record it, and then get back to the business same as you have done before.
Note: You can use this method if you have not already reconciled the account. But if you have reconciled the statement in the past, and still have some queries and issues then go to your accountant. This is a little complicated for you, not for your accountant, they well-know how to handle this situation with the next steps.
Steps to Enter an Opening Balance in QuickBooks Online
Follow the given steps to perform your activity:
Step 1: Ensure that You Don’t Already Have an Account Balance
You have to do nothing, just create a journal entry, and then visit your account register. Check at least two times that you don’t already have an account balance in QuickBooks Online. If you add one another then count all the transactions again.
- Go to the Accounting Menu>>Charts of Accounts
- Browse your account and from the action column simply choose View Register
- Search your register for an opening balance, you will get Opening Balance Equity in the Payee/Account Column and Opening Balance in the Memo Column
Note: If Opening balance appears to you then you don’t need to create a Journal Entry. Note down the date as well as the amount. Use your Bank records just to check out the Opening Balance you will have is correct or wrong.
If the Opening balance doesn’t appear to you, use the old transaction date and the amount in the account.
Step 2: Creating a Journal Entry
When you didn’t see any Opening balance Entry, It’s time to create a journal entry.
- First of all, Choose + New
- Pick Journal Entry
- You have to enter the date that comes before the oldest transaction currently in the account(because opening balance always comes before the oldest transaction). It can be treated as your new Opening Balance.
- Choose the account for which you want to enter the opening balance in the first line
- You have to use your bank statements for entering the right opening balance(it gives you an idea of opening balance). It must be the balance of your account on the opening balance date:
Assets: It includes all your savings and checking
Expense Accounts: In this field, simply enter the opening balance in the Debit column
Liability, Equity, and Income Accounts: In this field, simply enter the opening balance in the Credit column
Account Payable: In the Name Field, You can manually select the vendors you want to owe them money. Enter the amount as a credit if you are willing to increase the balance. Or you can enter it as a debit balance if you are willing to decrease the balance. You get a facility of creating separate lines or each vendor. The total amount of balance is equal to the opening balance.
Account Receivable: In the Name field, choose the vendors who owe you money. Enter the amount as a credit if you are willing to decrease the balance. Or you can enter it as a debit balance if you are willing to increase the balance. You get a facility of creating separate lines or each customer. The total amount of balance is equal to the opening balance.
- On the Second Line, In the account column, Choose Opening Balance Equity
- In the description field, write a short note so you can know what the journal entry is for
- Choose Save when you are ready and to accept the changes for completing the process
Step 3: Mark the Journal Entry as Reconciled
If you have not reconciled the account yet, It is required to reconcile the journal entry. This prevents you from showing future reconciliation.
- Visit the “Settings” and then move to the “charts of Accounts”
- Browse and Navigate the account and then choose “View register” from the Action column
- Now browse for the journal entry of opening balance you have just created, Pick it for expanding the view
- Choose the box where the checkmark column presents until you can see an R. This will help you in reconciling the transaction.
- In the end, Choose “Save”
You got a journal entry for creating the opening balance. Entries are reconciled to remove ambiguity or you can’t count it again. This helps in balancing the account. Few steps are taken for those who are willing to reconcile the account.
If your account is still not balanced then you can connect the professionals for consulting the issue. As we know, Opening Balance is the backbone of any business enterprise. You need to know your opening balance of every financial year, it is required whenever you start calculating business profits/ gains and losses it can only calculate if you know your opening balance. In case you do not, it will lead you to the wrong results.
So, this was the blog, regarding opening balance in QuickBooks Online, hope, you like it, and never face the situation ‘Did not enter opening balance in QuickBooks Online’ in the future. Still, if you can’t understand the blog, or having any kind of problem to follow the steps then, you can get our ProAdvisor support through the toll-free number +1-877-715-0222.