Opening balance is the balance that is found in your company’s account at the beginning of a financial year. This is the first entry done with the start of a company’s new financial year. There are instances when you may need to change the opening balance in QuickBooks.
If you are not aware of how to change opening balance in QuickBooks, here is an intuitive guide for you. Navigating through this post until the end will help you add, enter or edit the opening balance in the software.
What Does Opening Balance in QuickBooks Mean?
Before we proceed further, it is important to understand the term first. The opening balance is the amount of money your company has at the beginning of a new financial year. Opening balance entry is the primary entry after the end of a previous financial year. You may enter or edit the opening balance in QuickBooks.
The opening amount balance is carried forward at the start of a fiscal year from the previous tenure. Therefore, it is regarded as the first entry in your account books. Thereon, you can start calculating all your liabilities, assets, and expenses.
Now that you understand the term, let’s proceed further with the steps to edit an incorrect opening balance.
What is The Need To Change Opening Balance in QuickBooks?
When doing calculations of your accounts, it is possible to make errors. Sometimes, you may need to deal with huge accounting figures, making you prone to mistakes. The possibility of human errors can not be ruled out. Therefore, good programs like QuickBooks enable users to rectify their mistakes.
Similarly, when you enter the wrong opening balance in the QuickBooks Desktop or Online version, it affects your calculations. This miscalculation can lead to big accounting discrepancies. Therefore, it is crucial to change the opening balance in QuickBooks, regardless of your QuickBooks version.
How To Change Opening Balance In QuickBooks Online & Desktop Versions?
QuickBooks is one of the most preferred accounting applications used to handle your business accounting. It comes in two main versions – Desktop and Online.
If you want to harvest the full-fledged features of the program, QuickBooks Desktop is your best bet. However, if you want to manage your business accounting with the flexibility of an online program, go with QuickBooks Online.
The steps to change the opening balance varies from Desktop version to online. The steps for both versions are described in the next sections of this post.
How To Change Opening Balance in QuickBooks Desktop?
QuickBooks Desktop needs a physical IT infrastructure to be installed. This version of the program bestows your business with the most robust features to streamline your business accounting.
Desktop versions of the software are QuickBooks Pro, Premier, and Enterprise. The below-given steps can work for all the Desktop products of QuickBooks:
• In the first place, you need to open QuickBooks and then go to the List menu.
• Here, look for the Chart of Accountants.
• Once found, select the account wherein there is an incorrect opening balance.
• Thereafter, choose Edit and Use Register.
• Moving ahead, place the opening balance transaction. This transaction must be the first transaction in the account area labeled as Opening Balance.
Note: If there is no opening balance, you need to create a new transaction and change it the day before the first transaction.
• In the end, enter an opening balance and select Record in the opening balance area.
How To Change Opening Balance in QuickBooks Online?
Below are the steps to change the opening balance in QuickBooks Online:
• First things first, log into your QuickBooks Online account.
• Now from within the QuickBooks Online, select Setting and choose Chart of Accounts.
• Next, try to locate the specific account and choose the Action tab.
• Thereafter, choose the Account history of the account you have chosen.
• Here, you need to locate the opening balance entry and then select edit.
• On selecting the balance, you will get the option to re-enter the amount.
• Choose the Edit option to enter the correct amount for the opening balance.
• After that, click on Save, and it will save the changes.
• In the end, make sure if the new opening balance is updated or not.
How To Create An Opening Balance in QuickBooks?
When you download transactions in QuickBooks, the opening balance often gets inputted automatically from your online banking system. If you want to change your opening balance in QuickBooks Desktop or Online, you need to access the Chart of Accounts within the program.
If you want to ensure your statements produce correct records, it is crucial to keep your opening balance correct. With a correct opening balance, you can start reconciling QuickBooks with your bank account to ensure that all the transactions are made correctly.
If you want to create an opening balance in QuickBooks, follow the below-listed steps:
• Open the account wherein you want to enter the opening balance. Now open QuickBooks >> Lists >> Chart of Accounts >> account you want to work on. This series of actions will open the new account’s register. Click Create New Register if you don’t have one.
• Double-check your balance to make sure it is correct. Also, check the ending balance for the fiscal year and deduct outstanding checks from it.
• Now enter the start of your calendar year, which will show today’s date as default in this field. You need to change this to the date of the beginning of the calendar or fiscal year for your company.
• Scroll down to the Opening Account Balance field while leaving the Number and Payee sections blank.
• Here, enter the opening account balance and confirm twice that it is correct. If the opening balance is for equity accounts, select the “Increase” field. Contrarily, if it is for a bank account, select the “Deposit” field to make an entry.
• Now highlight the Account Type field, and it will open a drop-down list and select Opening Bal Equity from the menu.
• In the end, click the Record button to confirm your entry and create a new opening balance for your account.
Summing It Up!
Hopefully, this post has helped you with your quest on how to change the opening balance in QuickBooks. For any further assistance, you can connect with our team of experienced QuickBooks professionals.