How to Change the Beginning Balance in QuickBooks Desktop & Online?

How to Change the Beginning Balance in QuickBooks Desktop & Online?

Every time you reconcile your account, it is important to review the beginning balance in your QuickBooks account. Beginning balance is basically the amount entered in your account when you review the account in the beginning. The amount of the beginning balance should be matched with the statement of your bank. If you find any discrepancies, it is required to change the beginning balance. To fix the incorrect beginning balance, you can learn with us how to change the beginning balance in QuickBooks Desktop and QuickBooks Online, keep reading ahead.

When Do You Need to Change the Beginning Balance in QuickBooks?

As you select the account to reconcile when opening the Begin Reconciliation window, you may find the beginning balance incorrect. This may happen due to a number of reasons. For instance, when you enter no balance or the incorrect balance during the account setup and when the previously reconciled transactions are modified, voided, or deleted.

Even when the file is converted using the different QuickBooks or the data is damaged, you may find difficulties while reconciliation. That is where you may need to change the beginning balance. To know more about how to change the beginning balance when reconciliation in QuickBooks, keep reading ahead.

How to Change the Beginning Balance when Reconciliation in QuickBooks Desktop?

To change the beginning balance, you are required to understand the condition. For instance, if you are reconciling the first time, you can perform relevant steps to correct the zero amount. But, if the transactions have been deleted, cleared, or edited then you need to run certain reports to fix the incorrect balance. Let’s understand how to change the beginning balance in QuickBooks Desktop.

Condition 1: Correct the Zero Balance in QuickBooks Desktop

If you are reconciling the account for the very time then you will have to recreate the opening balance. However, you may not find this option in the Begin Reconciliation window. By creating the Journal Entry, you can perform the mini-reconciliation to fix the beginning balance. Here, we will show you the procedure of creating the Journal Entry and performing a Mini-Reconciliation.

Step 1: Create the Journal Entry

While creating the journal entry, you can use the correct amount and date you wish to view in the Begin Reconciliation window.

  • Click on the “Company” menu.
  • Then, click on the “Make General Journal Entries” option.
  • Here, you can modify the date to the statement date of the beginning balance.
  • Now, move to the first line and choose the relevant account using the “Account” drop-down menu.
  • After this, you can move to the “Debit” column and add the appropriate opening balance.
  • Then, switch to the second line and choose the “Opening Balance Equity” option.
  • Press the “Save” button.

Step 2: Perform the Mini-Reconciliation

Mini-reconciliation can be performed to fix the Beginning Balance in your Begin Reconciliation window.

  • Navigate to the “Banking” menu.
  • Then, click on the “Reconcile” option.
  • Now, move to the “Account” drop-down menu and choose the relevant account.
  • Here, you can add the “Ending Balance” and the “Statement Date” that can match the “Journal Entry”.
  • Press the “Continue” button.
  • Go to the “Deposits and Other Credits” option and choose the corresponding “Journal Entry”. Please note that the amount displayed for your “Difference” must be “Zero” now.
  • Click on the “Reconcile Now”.

Condition 2: Fix the Incorrect Balance in QuickBooks Desktop

If the transactions have been deleted, cleared, or edited, you may find discrepancies. In such a scenario, you can run the reports such as Reconcile Discrepancy report, Audit Trail report, and Previous Reconciliation report. In the following discussion, we will show you how to change the beginning balance in QuickBooks Desktop by running all these reports with detailed steps:

Reconcile Discrepancy Report

  • Click on the “Reports” menu.
  • Then, click on the “Banking” option.
  • Select the “Reconciliation Discrepancy” option.
  • Here, you can select the relevant account using the “Account” option.
  • Press the “OK” button.
  • At this point, you will have the transactions list that was modified since the previous reconciliation. You can use this report to recognize the change that is causing issues to transactions.
  • If you detect any discrepancies, you can note down the transaction date and last/entered modified details. This will let you know when the modifications occurred.

Audit Trail Report

  • Click on the “Reports” menu.
  • Choose the “Banking” menu.
  • Then, select the “Previous Reconciliation” option.
  • Click on the relevant account that is being reconciled.
  • Now, choose the date of the recent statement.
  • Here, you can select the transaction that was cleared during the time of reconciliation and click on the “Display” button. The report can be displayed as a PDF.
  • After this, note down the date of reconciliation and statement.
  • Once done, click on the “Report” menu.
  • Then, choose the “Accountant and Taxes” option.
  • Select the “Audit Trail” option.
  • Here, you can set a filter for “Account” using the following steps:
  • Go to the “Customize Report”.
  • Switch to the “Filters” tab.
  • Then, select the “Account” drop-down menu.
  • Choose the relevant account.
  • Switch to the “Display” tab.
  • Now, go to the “From” field and adjust the “Date” filter. Similarly, click on the “To” field and add the date of the statement.
  • Press the “OK” button.
  • Here, you can move to another filter for “Entered/Modified” and go to the “From” field to add the date of previous reconciliation creation from the PDF. In the “To” field, you can enter the date of today.
  • At this point, you can find out if any of these transactions can account for a discrepancy in the report.

Previous Reconciliation Report

  • Click on the “Reports” menu.
  • Then, click on the “Banking” option.
  • Select the “Previous Reconciliation” option.
  • Click on the relevant “Account” as well as the “Statement Ending Date” options.
  • Click the “Display” button.
  • Now, you can compare the reports with the past statements from the banking institutions.

Important Note: QuickBooks Desktop Pro users can access the previous reconciliation report. If you want to save the copy of reports, you can save it in a PDF format on the hard drive.

If you find any discrepancies after running the report, you will have to enter the transactions again. For that, you can undo the previous reconciliation or avoid the discrepancy and let your accounting software add the offsetting adjustments.

How Do I Change the Beginning Balance in QuickBooks Online?

Before changing the beginning balance, it is important to review the opening balance. If you find any discrepancies after comparing the balance entry with the bank statement then you can fix them. Let us show you how to review the beginning balance, edit the balance if required, and review the account register:

Step 1: Review the Beginning Balance

First of all, you are required to set the beginning balance. Thereafter, you can review it or compare the beginning balance with the bank account.

  • Click on the “Accounting” menu.
  • Then, click on the “Chart of Accounts” option.
  • Select the “View Register” option.
  • Here, you can look for the beginning balance entry. This should be available in the “Account” column as “Opening Balance Equity”.
  • At this moment, you need to make a note of the balance and date.
  • After that, compare the beginning balance with the bank account statement.
  • Now, go to the bank website to log in with your correct sign-in credentials. Or, you can search for the bank statement.
  • Once done, you can review the balance of the account for the same day as the beginning balance in the QB account.

Step 2: Correct the Beginning Balance in QuickBooks Online

While comparing these two balances, if the beginning balance does not match with the bank records then you need to fix it.

  • Choose the beginning balance entry in order to expand the view.
  • Now, move to the “Deposit” column.
  • Then, edit your balance so that it can match with the bank records.

Step 3: Review the Account Register

When the balance is matched, you can review the account register. Make sure no other transaction is being reconciled. To verify this, you can do the following:

  • Move to the “Accounting” menu.
  • Then, click on the “Chart of Accounts” option.
  • Now, search for the account on a list.
  • Select the “View register” to see more details.
  • Now, look for the opening balance entry. It must have an “Opening Balance Equity” label on the “Account” section.
  • Once done, you can review the checkmark section. Make sure there is an “R” that indicates reconciled status.
  • After that, check the remaining transactions on the list. Make sure there is either a blank box or “C” in the column of a checkmark.

If you find “R” on other transactions then choose that transaction in order to expand the view. Once done, place the check and keep selecting it until you see it blank. Thereafter, you can save the information and start the account reconciliation.

To Conclude

In QuickBooks, a reconciliation process is required every month. If the beginning balance does not match your real-life bank statement then you have to correct the beginning balance. QuickBooks Online and Desktop versions require different procedures that we have already discussed above. Hope you have understood how to change the beginning balance in QuickBooks Online and QuickBooks Desktop.

Learn more in detail about how to create a bonus check in QuickBooks online.

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments