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TCSmith
Level 1

Opening Balances

I have a new business and we are currently in the construction phase (we started the process in 2018).  I bought Quickbooks this month.  Even though my fiscal year starts January 1, can I make my opening balances in my accounts as of when I bought Quickbooks?  I have tried for days to do all the journal entries, but the way money exchanged hands (i.e. we paid vendor then bank soft cost loan reimbursed our personal checking then the actual bank loan paid off the bank soft cost loan, and on and on) is making it WAY too difficult to try and figure out all of those journal entries. 

 

I realize that figuring it out would be the most comprehensive and "right" way to go, but I believe I will end up making MORE mistakes trying to figure this out.  Is there anything legally wrong with using the account balances I have currently to get started?

1 Comment
Rustler
Level 15

Opening Balances

QBDT allows for entries to be back dated, you can enter them in no particular date order too.

 

journal entries are fine for starting balances, but once those are entered and you begin to use QB, Journal entries should be the exception when using QB, they often do not work as you think they should, and when you use inventory type items they never work for inventory. It is much better to use the forms on the home page the way QB is designed to be used. Journal entries also bypass accrual/cash reporting, and will not show on many reports.

 

As long as you account for expenses as well as assets, and liabilities you will be fine. Typically I prefer to have QB mimic real life. Each thing that happened, borrowing money, putting that borrowed money in a bank account, spending it, etc can be entered one at a time.

 

I also recommend that you get the tax form you will file, structure the chart of account to match the tax form, and use sub accounts to track detail for those major accounts

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