Opening Balance Equity

Hi EW20,

Thanks for joining us here!  QuickBooks Online provides the features you need in times like this.  I'd be happy to provide more information here!

When you create a new account in the Chart of Accounts, you can enter a day to start tracking from as well as the balance for that date.  If you haven't reconciled the account yet, you can create a  journal entry to record the opening balance.  However, if the account has been reconciled, it's best to reach out to your accountant.  If you don't have one, we can help you locate a ProAdvisor in your local area.

Before you get started, you'll want to make sure you don't already have an opening balance by following these steps;

1. Go to Settings ⚙ in the top right of your QuickBooks Online dashboard

2. Select Chart of Accounts

3. Locate the account and open the Account History in the Action column

4. Search for Opening Balance Equity in the Payee Account column.  The Memo column should have 'Opening Balance'

If you don't see an opening balance, make note of the date and amount of the oldest transaction in the account and create a Journal Entry.  Here's how;

1. From the left menu select + New and then Journal entry

2. Enter an Opening Balance Date that comes before the oldest transaction in the account

3. In the first row under the Account column, select the ▼ dropdown menu to choose the account you want to enter the opening balance for

4. Type a note in the Description field so you know what the journal entry is for

5. In the second row under the Account column, choose Opening Balance Equity from the ▼ dropdown menu

6. Use your bank statements to enter the balance of your real-life account for the date you picked as the opening balance. You'll need to enter both a debit and a credit to keep things accurate.

6. Enter the debits and credits based on the type of account you entered on the first line.

• Asset, enter the opening balance in the Debit column in the first row. Then, enter the same amount in the Credit column in the second row.
• Liability, equity, and income accounts: The Opening Balance is entered in the Credit column in the first row. The same amount is entered in the Debit column in the second row.
• Accounts Payable: In the Name field on the first row, select the supplier you owe money to, from the ▼ dropdown menu. Enter the opening balance as a credit to increase the balance, or as a debit to decrease the balance. Enter the same amount in the opposite column in the second row.
• Accounts Receivable: On the first row in the Name field, select the customers who owe you money. Enter the opening balance as a debit if you want to increase the balance, or as a credit if you want to decrease the balance. Enter the same amount in the opposite column in the second row.

7. When you're finished, hit Save and close.

Now that you've created the journal entry, you need to mark it as reconciled.  Here's how;

1. Locate the account in your Chart of Accounts and open the Account history in the Action column

2. Search for the journal entry and click on it to expand the view

3. Check the box in the Checkmark column until you see an 'R'.

4. Hit Save when done. 

Your opening balance is recorded and reconciled so it won't appear in future reconciliations.  Here's a helpful guide for your reference.

Please feel free to reach back out if you have any other questions.  We'd love to help!