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Level 1

Debtors and Creditors opening balance

When I created the debtors and creditors accounts in Quickbooks, I entered the opening balance for each of them. I noticed however that instead of allocating the amounts to creditors and debtors accounts, it did record them automatically in either an expense or an income. How do I update this? Do I have to do a journal entry to correct it? It does not allow me to correct in each debtor or creditor the account. Thank you. 

13 REPLIES 13
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Level 3

Debtors and Creditors opening balance

Hi shop,

When entering an opening balance, an income and accounts receivable (A/R) account are impacted for debtors and expense and accounts payable (A/P) account for creditors. The accounts are selected as the default account when you created your account. They can be edited once the original transaction is created. 

Here's how you can edit the income account assigned to debtors:

  1. Go to Sales.
  2. Click Customers at the top.
  3. Select the debtor's name.
  4. Select Transaction List.
  5. Click on the opening balance invoice created (this will be on the top transaction of the list).
  6. Once you have it opened, change the income account in the detailed line item of the invoice.
  7. Select Save.

Accounts receivable appears in the debit column of a transaction journal. This represents that the debtor still owes you money and will stay in Accounts receivable until the invoice is paid.  

To edit the expense account assigned to creditors:

  1. Go to Expenses.
  2. Click Suppliers at the top.
  3. Select the creditor's name.
  4. Select Transaction List.
  5. Click on the opening balance bill created (this will be on the top transaction of the list).
  6. Once you have it opened, change the expense account in the detailed line item of the bill.
  7. Select Save.

Accounts Payable appears in the credit column of a transaction journal. This represents that business still has a credit memo or balance due to the creditor.  Accounts Payable will be impacted by this opening balance until the bill is paid.

This will change the default accounts created, shop. Let me know if you have any other questions.

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Level 1

Debtors and Creditors opening balance

Hi there 

I am having the same issue - have you managed to sort it?

 Thanks 

Lori

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Moderator

Debtors and Creditors opening balance

Hello there, Dolores Rowley.

 

Thank you for posting here in the Community. It would be my pleasure to provide clarification regarding the debtors and creditors opening balance in QuickBooks Online.

 

When entering customer or vendor opening balance, it'll impact other accounts. For customers, it'll affect Accounts Receivable and the income account.

 

For Suppliers, it'll be the Accounts Payable and the Expense account. When you create the QuickBooks subscription, the default account selected would be Expense and Income.

 

For more insights about the opening balance, you visit the article I recommend below:

 

How to set up customer or supplier opening balance.

 

Please don't hesitate to come here with all of your QuickBooks needs. The Community is here to ensure your success. 

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Level 1

Debtors and Creditors opening balance

Has this been resolved as I have the same issue?

 

I have contacted the online help and they are telling me to write the customer off as a bad debt.  

 

Thanks

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Level 1

Debtors and Creditors opening balance

Hello

 

We prepare our accounts using the accruals basis and so the customer and supplier opening balances should be posted to the Balance Sheet and not the Profit and Loss account.

 

Is there a way to change this please?

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QuickBooks Team

Debtors and Creditors opening balance

Hello Glendapartridge1, 

 

Welcome to the Community page,

 

So there is no issue with this, the system is working as designed to. If you think it is not then we suggest speaking with your accountant about this and what it means. The information the previous agent has given you is correct and there is nothing going to change if you use cash or accrual as well.

 

The debtors and creditors amounts will post to the balance sheet, the income and expense amounts will post to the Profit and Loss, the opening balances for customers and suppliers usually post to both those places. 

 

 

 

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Level 1

Debtors and Creditors opening balance

Thank you for your reply.

 

The opening balance is posting to an income account (profit and loss) but the income has already been accounted for pre QuickBooks. If I continue with your advice then we would be accounting for the income twice.

 

I was hoping I would be able to post to an opening balance equity account but I don't seem to be able to change that, only a different income account?  I was hoping for some advice as to how to account for the opening balances correctly as by entering it via the New Customer window is not correct for a balance brought forward.

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QuickBooks Team

Debtors and Creditors opening balance

Hello Glendapartridge1, 

 

What you could do is delete the other method of accounting for the income, or delete the invoice that is created when entering an opening balance and then manually create a journal posting to opening balance equality and debtors if you want to do it that way you can. 

 

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Level 1

Debtors and Creditors opening balance

I am trying to enter an accounts receivable opening balance. When doing a journal entry to record this I can debit accounts receivable and specify the customer. What should the credit entry be? It is not sales as it is a balance brought forward and I do not want it included in the sales of the new period. Thanks for your help

 

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Level 2

Debtors and Creditors opening balance

Dear Everyone,

 

As an Accountant and Quickbooks trainer I come across these issues all the time. Users follow a basic common sense approach and want to set up their opening balances but without understanding accounting and how it impacts the profit and loss and balance sheet. Some basic accounting knowledge is really useful when using Quickbooks and particularly in the setting up. Quickbooks help line staff understand the mechanics of how the system works but also dont understand accounting so you end up going around in circles.

 

Basically when you start Quickbooks you SHOULD start with an opening TB ( Trial Balance) , this is a list of all the balances for your balance sheet at a particular date - ideally the year end. 

 

You would enter this by way of a journal. The date of this is really important . It is the date of the brought forward balance ( i.e the last date in the last financial year) not the current financial year.

 

A simple Trial balance journal for the balance sheet would look something like this.

                             Debit        Credit

Fixed Assets         1000

Bank Account        100

Prepayments          100

Debtors *               3246

Creditors*                              1890

 

Profit & Loss B/F                    2556 ( because it is last years accounts we are not interested in the profit and loss accounts individually  so this is posted to an equity account P & L or retained profits) 

 

Total                     4446         4446

 

Notice both sides balance , hence the name trial balance.  The debtors are entered individually to the individual accounts, this is the best, cleanest, and easiest way to set this up.

 

If you have entered the debtors and creditors from the Quickbooks opening balance option then it would have put the total of the amount owing  for the Debtor / Creditor in the correct place BUT as all the questions verify the other side of the entry will be in the wrong place, this particularly true if you have used the date in the current financial year. I find the best way is to work out where the individual opening balance entries have gone, by drilling into one of them, then go to more at the bottom of the screen then transaction journal. You can then make the appropriate adjusting journal entries to take out of the account used and into the one that should be used on the trial balance. You may do this by using a suspense account which clears to zero when all opening balance entires and TB is entered. 

 

It is very important to get your set up correct otherwise your accounts will not show the correct reports, you will become frustrated. 

 

I hope this helps

 

Martyn A Smith A.F.A, M.I.P.A

Institute of Financial Accountants

www.themobileaccountant.co.uk

Certified Gold Quickbooks Trainer and Accountant

www.quickbookstraininguk.co.uk 

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QuickBooks Team

Debtors and Creditors opening balance

Hello Suzie737, 

 

Welcome to the Community page, 

 

 

We would advise you to speak to a trained accountant who will be able to help and advise how to do the journal and which accounts to post it against, as we are not trained accountants just technical support. 

 

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Level 2

Debtors and Creditors opening balance

HI, Thanks for the extra context on opening balances, if I may ask a question...

 

If I want detailed opening balances for debtors and creditors i.e. made up of the individual invoices that are outstanding.  Do I create a journal for each? Do I raise a dummy invoice or each to retained earnings or is there a feature in QBO for doing this?

 

Any resource I find only mentions the lump sum entering of opening balances whereas  detailed is far more helpful where you have more than five of six debtors/creditors or multiple invoices on an account.


Thanks

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QuickBooks Team

Debtors and Creditors opening balance

Hi mugeelbbub If you want the opening balance of a customer or suppliers to be made up of a number of invoices/bills/amounts you will either have to, create the transactions manually or create them via journals. The transactions will be created in the normal manner with their corresponding accounts, debtors would be debited and the income account used within the product will be credited.