Learn how to enter a prior balance for a customer that owes you money or a supplier you need to pay.
If you’re new to QuickBooks Online, you might have customers or suppliers with open balances. We’ll show you the recommended way to manage those balances as you're creating your customer and supplier profiles.
When to use opening balances
Opening balances are important when you're connecting a bank or credit card to QuickBooks Online. They help ensure that QuickBooks matches your bank records exactly, from the date you started with QuickBooks. But new customers and suppliers are different. You have the option to enter opening balances when you’re creating new customer or supplier profiles, but it’s not recommended.
How to manage customer and supplier balances
If you have customers and suppliers that have an open balance prior to the date you opened your QuickBooks Online account, it's recommended to leave the opening balance blank. Instead, add your customer's unpaid invoices or your supplier's unpaid bills to QuickBooks. This lets you add clear details about what your customers are paying for and what you're paying your suppliers for.
To get started, select whether you're adding a customer or supplier.
Add unpaid invoices for a new customer
Here's how to get started:
- When adding a new customer, leave the Opening balance blank.
- Select Save.
Then, create any unpaid invoices for the customer:
- Go to Customers & leads, then select Customers (Take me there).
- Select the customer.
- From the New transaction ▼ dropdown, select Invoice.
- Then, create a new unpaid invoice for the customer.
- Make sure the Invoice date is the actual date you provided the products or services.
- Repeat for any other unpaid invoices for this customer.
Important: Only add unpaid invoices. Don't add any transactions for this customer that were paid and closed before you started using QuickBooks.
Add unpaid bills for a new supplier
Here's how to get started:
- When adding a new supplier, leave the Opening balance blank.
- Select Save.
Then, create any unpaid bills you owe the supplier:
- Go to Expenses, then select Suppliers (Take me there).
- Select the supplier.
- From the New transaction ▼ dropdown, select Bill.
- Then, create a new unpaid bill for the supplier.
- Make sure the Bill date is the actual date you received the bill.
- Repeat for any other unpaid bills for this supplier.
Important: Only add unpaid bills. Don't add any transactions for this supplier that were paid and closed before you started using QuickBooks.
What if I already added an opening balance?
If you entered an opening balance instead of leaving it blank, don't worry. We'll show you how it affects your books, and what to do next.
To get started, select whether the balance was for a customer or supplier.
Find a customer opening balance
When you add a customer opening balance, QuickBooks creates a generic invoice for the customer. Invoices affect Accounts Receivable (A/R) and Income accounts.
- Accounts Receivable (A/R): This means the customer still owes you money. The invoice will stay in accounts receivable until it's paid.
- Income: The invoice is assigned to a nonspecific income account (like Sales).
Since the invoice is generic, it's unclear what the customer is paying for. To avoid any confusion later, you can add specific details to the invoice, or delete it.
- Go to Customers & leads, then select Customers (Take me there).
- Select the customer.
- Find and select the Opening balance invoice.
Then, you can add the specific products or services you provided:
- In the Product/Service column, select the ▼ dropdown and choose another item or add a new line, as needed.
- The products or services you select determine the income account(s).
- Select Save and close.
Or, you can void or delete the invoice and follow the steps above to add the specific invoices the customer hasn't paid yet.
If you're not sure which option to choose, check with your accountant. Don't have an accountant? We can help you find an Advisor.
Find a supplier opening balance
When you add a supplier opening balance, QuickBooks creates a generic bill for the supplier. Bills affect Accounts Payable (A/P) and Expense accounts.
- Accounts Payable (A/P): This means you still need to pay the supplier. The bill will stay in accounts payable until it's paid.
- Expense: The bill is assigned to a nonspecific expense account (usually Other Miscellaneous Expense).
Since the bill is generic, it's unclear what you're paying for. To avoid any confusion later, you can add specific details to the bill, or delete it.
- Go to Expenses, then select Suppliers (Take me there).
- Select the supplier.
- Select the Opening balance bill.
Then, you can add more specific expense details:
- Change the expense account in the detailed line item of the bill or add a new line as required.
- Select Save and close.
Or, you can delete the bill and follow the steps above to add each bill you'll need to pay.
If you're not sure which option to choose, check with your accountant. Don't have an accountant? We can help you find an Advisor
The method for entering outstanding balances for customers and suppliers depends on when you started using QuickBooks Online. Generally, it depends on whether they had balances before your QuickBooks Online start date, or after your start date.
| Note: If you want to keep track of individual sales or bills that make up your customer and supplier opening balances, enter each unpaid invoice and unpaid bill instead of entering a total balance for each customer and supplier. |
