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Intuit
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Enter opening balances for accounts in QuickBooks Desktop

An Opening Balance is the amount of money or funds you have for an account during initial setup or at the start of your Fiscal Year. This article details the steps in entering or editing opening balance in QuickBooks Desktop.

Reminders:

  • It is best to consult your accounting professional before entering an opening balance . You can also press F1 key or select the Should I enter an opening balance? link while setting up an account, customers, or vendors in QuickBooks to help you decide and get more information about opening balances.
  • If you did not have a balance before your QuickBooks start date1, you should not enter an opening balance. Instead, you can create a transaction (such as Deposit for bank or funds transfer for equity accounts) to add money to the account. If you're not sure which type of transaction to use or how to proceed, consult your accountant.
  • When you start a new company file with a start date later than the actual company, you can enter Opening Balances using one or more GJE that you create from the Balance Sheet for the previous fiscal year. If you use journal entries to record opening balances, be mindful of the following:
    • Consider using the Opening Balance Equity2 account as the offset account to keep the journal entries in balance.
    • If you are entering balances for the start of the year it may be enough to enter a balance for last year's retained earnings3 rather than for each income, expense and cost of goods sold (COGS) account.
    • You can enter only one accounts receivable or accounts payable transaction per journal entry, so you need to make multiple journal entries to load the balances for these accounts.
    • Remember to include a vendor or customer name in the Name column of journal entries to accounts payable, accounts receivable, and sales tax payable.
    • Instead of entering the Inventory Asset balance through a journal entry, you may wish to use the Inventory Adjustment screen to adjust both inventory value and quantity.

1 The date you entered when you setup your company file to indicate when you would begin tracking your financial transactions in QuickBooks.2 Created by QuickBooks the first time you enter an opening balance for a balance sheet account. As you enter the opening balances, QuickBooks records the amounts in Opening Bal Equity. This ensures that you get a correct balance sheet for your company, even before you've entered all your company's assets and liabilities.3 Profits from earlier accounting periods that have not been distributed to the company’s owners. At the end of your fiscal year, QuickBooks computes your profit (or loss) into an equity account named Retained Earnings.

Enter opening balance

  1. From the Company menu, select Chart of Accounts.
  2. In the Chart of Accounts window, right click anywhere and select New.
  3. Choose Bank or Credit Card for the Account Type.
  4. In the Add New Account screen:
    1. Fill out all required fields.
    2. Select the Enter Opening Balance button.If you have not entered any transaction yet, the Enter Opening Balance button will be available even after the account is setup. Once transactions are entered, you will see Change Opening Balance button instead.
    3. Enter the Ending Balance and Ending Date from the last bank or credit card statement you received before your QuickBooks Start Date.
    4. Click Ok.
  5. Select Save & Close.

If you have outstanding transactions in the bank or credit card, you need to account for them in order for your future reconciliation to be accurate. Once you have entered your opening balances, follow these steps:

  1. Take the ending balance from the last bank statement and:
    1. Increase the amount by any outstanding checks.
    2. Decrease the amount by any outstanding deposits.
  2. Enter a journal entry debiting the bank or credit card account and crediting opening balance equity.
    1. From the Company menu, select Make General Journal Entries.
    2. Set the date and enter a number for the journal entry.
    3. From the Account column, choose the bank or credit card account and in the Debit column, enter the amount calculated in step 2.
    4. On the next line, click the Account and from the drop-down, choose Opening Balance Equity. In the Credit column, enter the amount calculated in step 2.
  3. Enter the outstanding transactions by creating checks or deposits using the Opening Balance Equity as the expense/income account. These transactions will become available for reconciliation without impacting the prior period balance sheet.
  4. Reconcile this opening balance journal entry for each account through a process called mini reconciliation. Refer to 6950 for detailed steps.

You need to be careful when entering an opening balance for a Fixed Asset, Equity, Long-term Liability, Other Asset, Other Current Asset and Other Current Liability account because it's possible to create a double accounting entry. Also, Accounts Receivable and Accounts Payable opening balances are treated differently in QuickBooks. See the Customers and Vendors section in this article for information on how to set it up.

Through the Chart of Accounts

  1. Go to the Settings ⚙ icon, click Chart of Accounts.
  2. In the Chart of Accounts window, right click anywhere and select New.
  3. Choose the appropriate Account Type.
  4. In the Add New Account screen:
    1. Fill out all required fields.
    2. Click the Enter Opening Balance button.
    3. Enter the amount of the opening balance and the date. Use the date before your QuickBooks start date.
    4. Click Ok.
  5. Click Save & Close.

Using a journal entry

  1. From the Company menu, select Make General Journal Entries.
  2. Set the date and enter a number for the journal entry.
  3. From the Account column, choose or create the account to be entered. You may wish to enter the accounts in the order in which they appear on the balance sheet or trial balance.
  4. Enter the account balance as a positive amount in the appropriate column depending on the type of account.

    Example:

    • For Asset accounts, positive balances appear in the Debit column.
    • For Liability and Equity accounts positive balances appear in the Credit column.
  5. Repeat steps 3 and 4 for each account.
  6. When all balances have been entered, the totals in the Debit and Credit columns must be equal. Use the Opening Balance Equity account as the offset for any difference between the two columns.
  7. Select Save & Close.
  8. Create additional journal entries or other transactions to enter balances for accounts receivable, accounts payable, sales tax payable or any other account not included on the first journal entry.
  9. Create a final journal entry to distribute any remaining balance in the opening balance equity account among other equity accounts and retained earnings as appropriate.

Through the Register

If you already have transactions in the account, you need to go to the account register to enter the opening balance.

  1. Settings ⚙ icon, select Chart of Accounts.
  2. Select the account for which you want to enter an opening balance, and then from the Edit drop-down list, choose Use Register.
  3. Complete the fields for the new transaction as follows:
    • Date: Date of the opening balance.
    • Number/Type: Leave blank.
    • Payee: (Optional) Type Opening Balance.
    • Account: Choose Opening Bal Equity.
    • Payment or Deposit: Enter the amount of the opening balance in the Deposit field if it is positive, or in the Payment field if it is negative.
  4. Select Record.

There is no option to enter an opening balance for income and expense accounts as the balances for these accounts come from transactions you enter such as checks, bills or invoices.

For outstanding balance before your start date: If the customer or vendor has outstanding balance before your start date, use any of the following options to record the balance.

Option 1: Enter the outstanding balance in the Opening balance field with the As of date equal to your start date. The opening balance entries track to Uncategorized Income (customers) or Uncategorized Expense (vendors). If you plan to setup jobs for customers, enter opening balances for the individual jobs instead. The customer name will reflect the total balance for all its jobs. Note that the opening balance field is only available when you add new customers/vendors.

Option 2: Create an Opening Balance item and use this in invoices and bills to create opening balances for customers and vendors. Using this option helps you determine which account you want the entries to track to.

Option 3: Enter individual unpaid invoice or bill instead of a total balance for each customer and vendor. The unpaid transactions will result in open balances for customers and vendors, and those balances will collectively result in A/R and A/P opening balances. This option is particularly helpful if you need to keep track of individual sales or bills that make up your customer and vendor opening balances.

For transactions that occurred after your start date: If the customer or vendor transactions occurred on or after your start date, you can use standard QuickBooks forms to enter the appropriate individual transactions such as:

  • Invoices and sales receipts (with sales tax, if appropriate)
  • Customer returns
  • Customer payments
  • Deposits
  • Sales tax payments
  • Vendor bills
  • Vendor credits
  • Bill payments

Edit opening balance

  1. From the Lists menu, select Chart of Accounts.
  2. Double click the account with an opening balance you need to edit.
  3. In the Account register, find the opening balance transaction which is usually the first transaction and has Opening Balance Equity in the Account field.
  4. Edit the amount and date (if necessary).
  5. Select Record to save the changes.
  1. From the Lists menu, select Chart of Accounts.
  2. Double click the income or expense account you need to edit.
  3. In the Account QuickReport, change the date to your start date. If you are unsure of the start date, select All in the Dates drop-down and then search the report for the correct transactions, which are typically among your first transactions.
  4. QuickZoom the transaction by hovering the mouse pointer over a transaction until a magnifying glass appears then double click it.
  5. Make the appropriate changes. If the changes to be made affect a journal entry, remember that a General Journal Entry transaction requires that total debits equal total credits.
  6. Click Ok.

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