An Opening Balance is the amount of money or funds you have for an account during initial setup or at the start of your Fiscal Year. This article details the steps in entering or editing opening balance in QuickBooks Desktop.
If you have outstanding transactions in the bank or credit card, you need to account for them in order for your future reconciliation to be accurate. Once you have entered your opening balances, follow these steps:
Important: You need to be careful when entering an opening balance for a Fixed Asset, Equity, Long-term Liability, Other Asset, Other Current Asset and Other Current Liability account because it's possible to create a double accounting entry. Also, Accounts Receivable and Accounts Payable opening balances are treated differently in QuickBooks. See the Customers and Vendors section in this article for information on how to set it up.
You can also use journal entries to enter your opening balance.
If you already have transactions in the account, you need to go to the account register to enter the opening balance.
There is no option to enter an opening balance for income and expense accounts as the balances for these accounts come from transactions you enter such as checks, bills or invoices.
If the customer or vendor has outstanding balance BEFORE your start date, use any of the following options to record the balance.
Option 1: Enter the outstanding balance in the Opening balance field with the As of date equal to your start date. The opening balance entries track to Uncategorized Income (customers) or Uncategorized Expense (vendors). If you plan to setup jobs for customers, enter opening balances for the individual jobs instead. The customer name will reflect the total balance for all its jobs. Note that the opening balance field is only available when you add new customers/vendors.
Option 2: Create an Opening Balance item and use this in invoices and bills to create opening balances for customers and vendors. Using this option helps you determine which account you want the entries to track to.
Option 3: Enter individual unpaid invoice or bill instead of a total balance for each customer and vendor. The unpaid transactions will result in open balances for customers and vendors, and those balances will collectively result in A/R and A/P opening balances. This option is particularly helpful if you need to keep track of individual sales or bills that make up your customer and vendor opening balances.
If the customer or vendor transactions occurred on or AFTER your start date, you can use standard QuickBooks forms to enter the appropriate individual transactions such as: