Hey amit6,
It's great to have you aboard! Hope you're liking how simple QuickBooks Online makes your accounting so far. Keeping your balance sheet up to date with your company's prior profit and losses allows you to get a clear picture of how much capital is available for distributions and reinvestment. QuickBooks Online automates this recording into the Retained Earnings account when you close your books, reducing the hassle of your fiscal year-end. Entering an opening balance is equally as simple, I'll show you how to get started.
The simplest way to record an opening balance for an existing balance sheet account is by using a journal entry. You can get started in just a couple easy steps:
- Select the + New button.
- Select Journal Entry.
- Enter a date. (Note: the automatic entries created by QuickBooks Online use the last day of the fiscal year. Ask your accountant if you're unsure.)
- On the first line, select the equity account Retained Earnings and enter the amount in the appropriate column.
The second line is somewhat more complicated. By default, QuickBooks Online uses the Opening Balance Equity account to record opening balances. Due to the nature of the Retained Earnings account, this may not be the ideal account to choose for your business. Please speak with an accountant if you're unsure. If you have an accountant, you can easily invite them as a user so you can work together. To find one in your area, simply head to the My Accountant tab in QuickBooks Online then click on Find a pro to help.
To read more about entering opening balances, check out this handy article: What to do if you didn't enter an opening balance in QuickBooks Online
Here's another great article pertaining to Retained Earnings: How to view Retained Earnings account details
Let me know how this goes!
