Enter and manage opening balances in QuickBooks Online

[0:00] The Chart of Accounts is an organized list of all financial accounts in a company's general ledger. You can add most bank and credit card accounts to your Chart of Accounts automatically when you connect them to online banking. Let's go over how to manually add an account to your Chart of Accounts and why the opening balance is so important.

[0:17] Then we'll go over how to add multiple accounts at the same time. Select Settings… Chart of Accounts. Account types tell you where an account shows up on your financial statements. On the Chart of Accounts, you'll see your accounts listed in the order they'll appear on the Balance Sheet and the Profit & Loss. Let's create a new account. Select New account.

[0:38] For this example, we'll set up a business bank account. Enter a name for the account, and a number if you use account numbers. Next, choose the type of account you want to set up. Check out this video to learn more about account types and how QuickBooks builds your financial statements. The Detail type provides more info about what the account tracks for your business.

[0:57] We're setting up a Checking account. Next, if you're setting up a Balance Sheet account, pick a starting point for the account and enter it in the As of field. Most businesses choose to start tracking accounts from the beginning of the year. That way, QuickBooks matches your bank records from the start. Note that this is only necessary for accounts you set up yourself.

[1:16] When you connect a bank or credit card account to online banking, QuickBooks handles all of this for you. Then, enter the amount of money you had in your real-life bank account on that day. In QuickBooks, this is called an opening balance. The best way to find this is on your bank or credit card statement. This number is very important.

[1:35] It becomes the account's starting point and will help ensure your QuickBooks records match your bank's records. You can enter your own notes about the account in the Description field. When you're done, select Save. Now, you're ready to start recording new payments and deposits that happened after the starting date you choose.

[1:51] You don't need to enter anything that cleared the account before that date. If you decide later on to add transactions before the As of date, we recommend working with your accountant. Remember, all of your old transactions were summarized in the opening balance. If you add them now without adjusting the opening balance, you'll count your money twice.

[2:09] In some cases, you won't enter an opening balance at all. If you're setting up an account to track a Fixed Asset and will later record the purchase, leave the opening balance empty and use the account when you enter the purchase. If you have several accounts to add, you can speed up the process by uploading a spreadsheet with the account info. To do that, select Settings… Import Data.

[2:30] Then select Chart of Accounts and choose Import. Attach the spreadsheet and select Next. Then, map the fields in your spreadsheet with the fields in QuickBooks. Once you've got everything matched up, select Next. You can make any final changes here. When you're done, select Import. Note that opening balances don't import with the accounts.

[2:52] But opening balances are very important, so if those accounts need prior information, make sure you add them after you import. If you use QuickBooks Online Accountant, you can also use Chart of Accounts templates to quickly set up a client's Chart of Accounts. Now you're ready to set up your accounts one by one or in a batch.