There are two ways to enter an opening balance into QuickBooks: one is at the time the company file is first being set up in the computer; the second is an "edit" where a pre-dated transaction is entered after some of the main transactions have been entered. Failure to enter these transactions correctly can make the reconciliation of these accounts impossible.
Create the opening balance upon completing the Easy Step Interview. When you first install QuickBooks onto any computer, the software will take you through a basic question and answer format interview to aid in the filling in of information about your business. One of the final questions is "Do you wish to add your bank account now?" Click on the "Yes" button, and the "add new account" window will pop up.
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Name the account. If your business has more than one checking account, one for payroll and one for operations for example, specify which account you are currently creating when you name it. Enter the optional information in the lower portion of the screen. This includes the "Description" (enter ABC Checking Account, for example). Enter the bank account number and routing number as well. Putting the information in now will allow the electronic banking features of QuickBooks to work. The "Tax Line Mapping" is automatically assigned for you to the Balance Sheet-Assets: Cash account.
Enter the "correct" opening balance. The "correct" opening balance depends on when this account was opened. If the account has been open for some time and you have just begun using QuickBooks, you won't want to enter an excess of transactions that have already taken place. Choose the month that you are going to start using QuickBooks to reconcile your accounts. If you wish to choose April as the first month, click on the "Enter Opening Balance" button and enter the statement ending balance from the previous month in March. You will find this on your bank statement. Enter the last day in March the bank uses on its statements in the "Ending Date" box and click on "OK." This gives the month of April a beginning balance so that you can reconcile the QuickBooks with the bank statement later.
Enter in the balance on the new bank account. If you have just started using QuickBooks, and you have just opened your bank account, enter in a zero balance as the ending balance from the month prior. Begin using the program as instructed and when the bank statement arrives, it will make reconciliation easy.
Create credit card, loan and liability balances. Return to the chart of accounts and hold the "CTRL" and "N" keys. Create an account for each credit card, loan and liability account that pertains to your business. Using the same method as entering an opening balance for a bank account, add an opening balance for each of these. Each of these types of accounts will need to be reconciled and as such will require an opening balance.