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How to Change the Beginning Balance in QuickBooks

Change the Beginning Balance in QuickBooks

The online banking system has an automatic entry system. Thus, the opening balance is automatically entered at the time of downloading the statement. However, in QuickBooks, the method is quite different. With the feature “Chart of Accounts,” you can monitor the opening balance. If the opening balance is wrong, the statement in the reports will be inaccurate. As you enter the accurate opening balance, you should now reconcile it with your bank statement. This step will ensure that all the transactions are correctly processed. QuickBooks allows you to edit, enter, and add the opening balance. However, before delving into the detailed steps, you must know what the opening balance is:

Defining the Opening Balance in QuickBooks

Opening balance refers to the amount that is recorded in the company’s account at the beginning of the new financial year. The balance, or primary entry, is done at the start of the earlier financial year. In other words, the business enters the data before the onset of a fiscal year.

Hence, it is treated as the first entry in the book of accounting. Following this will be all other records, including assets, expenses, liabilities, etc.

Steps to Add, Edit, or Enter the Opening Balance in QuickBooks

If you are a new QuickBooks account user, you will be able to select a date to track the organization’s transactions. Choosing the date will also allow you to enter the balance of the bank account (physical) for the date you have already selected.

This entry now collates with all the other transactions done to date. If the entry is correct, it will be similar to the bank records done to date. To understand it in detail, follow the steps given below:

Entering the Opening Balance

  • Click on “Chart of Accounts” from the company session.
  • To select New, right-click on the mouse.
  • Choose the type of Account. The account must be either the bank account or the credit card account.
  • In the “Add New Account” section, enter the required details.
  • As you have not entered any transactional details, you will input the opening balance.
  • Click OK. By clicking on “Save and Close,” the balance is successfully recorded.

As you have completed the steps, there are some after-steps that you must follow. They are:

  • Focus on the closing line of your bank statement. You have to simultaneously decrease and increase the figure with outstanding deposits and outstanding checks, respectively.
  • Make a journal entry of the amount debited from the debit or credit card. You must also mention the amount credited to the opening balance equity.
  • Go to “Make Journal Entries” from the Company. Enter a date and number for the entry.
  • Hit on Account from the below line and then “Opening Balance Equity” from the drop-down.
  • Enter the calculated amount under the credit column.
  • “Opening Balance Equity” will begin creating the inputs for all the awaited transactions.

It will reconcile, no matter what the impact is. You must reconsider the opening balance against each entry with a mini-reconciliation process.

Editing the Opening Balance

  • Navigate to “Chart of Accounts” under the list.
  • Double-tap the account where you will be editing.
  • Go to the opening balance transaction details mentioned in the account register.
  • You can edit the date along with the amount.
  • Save the changes by clicking on “Record”.

The above steps are the generic ones. The steps differ from each other in the different versions of QuickBooks. The details are elaborated below for easy understanding.

Editing the Opening Balance in QB Desktop

These steps are for the QB Premiere, Enterprise, and Pro versions:

  • Step 1: Click on “Chart of Accounts” from the list menu.
  • Step 2: Click on the account where you will be editing and choose “Use Register”. 
  • Step 3: This balance is the first transactional entry in the accounting zone. In case the opening balance entry is absent. You must create it with a new date.

Step 4: To “Save” the changes, tap on “Record”.

Editing the Opening Balance in QB Online

  • Step 1: Log in to your Account.
  • Step 2: Select “Settings” from “Chart of Accounts”.
  • Step 3: Select the desired account and then “Action”.
  • Step 4: Go to the “Account History” of the selected account.
  • Step 5: Mark the Opening Balance section and choose Edit.

Step 6: Save the changes.

Editing the Opening Balance in the QB Expense or Income Account

  • Step 1: Click on “Chart of Accounts” from the list menu.
  • Step 2: Double-click on the account (Expense or Income) that you want to edit.
  • Step 3: Under the “Account Quick Report” section, edit the date. If you are confused about the start date, select all from the drop-down menu of dates.
  • Step 4: To look for the transaction, search the transaction report.
  • Step 5: If you want a closer or bigger view of any entry, double-click on the magnifying glass icon.
  • Step 6: Make the changes.
  • Step 7: Tap OK.

How to Enter the opening balance in Other Accounts

Every account, irrespective of Current Assets, Fixed Assets, or equity, has a beginning balance. Make sure to check whether you made an error by creating a double entry. Moreover, accounts payable and Accounts receivable are treated differently in this portal.

Using a Chart of Accounts

  • Tap on “Chart of Accounts,” located under the Company.
  • In the window, right-click at any place to access the “New” menu.
  • Select the desired Account type.
  • The “Add New Account” screen pops up.
  • Fill in the details there. Tap the “Enter Opening Balance” tab.
  • Enter the amount and the date.
  • Click on OK. Save the process and click “Close” to exit.

Using Journal Entry

  • Navigate to the “Company” menu and select “Make General Journal Entries.”
  • Enter the credentials (amount and date).
  • Select the account from the Account Column.
  • You can organize the accounts in the order of your choice. It will reflect on the balance sheet.
  • Enter a positive amount as the account balance. For example, In the case of an Asset account, the balance will be in the debit column.
  • Repeat the above steps for each Account type.
  • Recreate the journal entries to save them as accounts payable, sales tax, etc.
  • Last but not least, to distribute the leftover balance of the equity account among the desired accounts, create a journal entry.

Using the Register

  • Tap on “Chart of Accounts,” located under the Company.
  • Choose the Account.
  • From the drop-down menu of the Edit menu, select “Use Register”.
  • If it is a new transaction, enter the date of opening balance, payee, number (keep it blank), opening balance equity, or account.
  • If the opening balance is positive, enter it in the deposit field. On the other hand, if the figure is negative, enter it in the Payment field.
  • Tap on “Record”. 
  • Using the Outstanding Balance From the Last Fiscal Year

If any vendor or customer has any leftover balance before the start of the financial year, the following steps must be taken:

  • The date and the outstanding balance amount must be equal. These balances are generally treated as other income. If you are planning to do a job entry for the customers, you have to enter the balance individually for each entry.
  • Use it in invoices as an opening balance.
  • Using the Transactions that Happened Post the New Fiscal Year

If any vendor- or customer-related transactions occur after the start date, you can record them using QB forms. The transaction must be from one of the following categories:

  • Vendor Bills 
  • Vendor Credits
  • Bills
  • Bill Payments
  • Payments of Sales Tax
  • Invoices
  • Customer returns
  • Sales Receipts
  • Customer Payments

Tips to Enter the Beginning Balance in QuickBooks

  • Always consult your accountant before editing the opening balance. To enter the balance, press F1 on the keyboard. You can also click the link stating whether you will be entering the balance or not. This step fetches the information related to the balance.
  • If there is no balance before the start date of QuickBooks, you do not need to enter the balance.
  • You may have access to one or more GJEs. In such cases, you can use the Opening Balance Equity Account as an offset account for journal entries. In addition, you can enter the amount of the past year’s retained expenses.
  • Adjust the inventory value and quantity in the Inventory Adjustment window.
  • You will have the option to enter only one Account Receivable or Payable Entry. Also, always enter the name of the vendor in the names column while entering the journal entry.

Conclusion

The above steps will guide you to enter the correct beginning balance in QuickBooks. You can also explore the different types of accounts and the different versions while editing the balance. Sometimes, a person with sound financial knowledge can also make mistakes while entering the opening balance. Thus, this article will save you from making any such major mistakes.

FAQs

What do I do if I forget to enter the beginning balance while creating the Company Account?

You can make a journal entry to enter the opening balance. Besides, you also need to make the following entries: journal number, date, and tick the respective tab. Make sure that if the figure is negative, you enter it on the credit side.

How do I edit an opening balance in QuickBooks?

Select “Chart of Accounts” from the Select menu. You have to select the account, then the action column, and then look for the Account history. Now, mark the opening balance entry. Edit the amount and save it.

Where do I need to enter the opening balance in QuickBooks?

The opening balance is the topmost balance entered on the balance sheet. A balance sheet is a statement that is used to estimate the budget of a business. It is a report consisting of the annual transactions related to assets, liabilities, expenses, etc.

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