How Do I Enter a Beginning Balance in QuickBooks Online & Desktop?

How Do I Enter a Beginning Balance in QuickBooks Online & Desktop?

When creating a new account, you choose a day for tracking the transactions in QuickBooks. Thereafter, you enter the amount of the real-life bank account specifically for the day you choose. This beginning stage is also known as the opening balance of the account. This is to summarize all your transactions that appear before this. By entering the same amount in your QuickBooks account, you can match the bank records from the beginning. However, not every user knows how to get this done. If you are stuck by this question “how do I enter a beginning balance in QuickBooks”, this guide has your answer.

While reading this guide, you will learn how to enter a beginning balance in QuickBooks Online and QuickBooks Desktop. Make sure you read the details and implement the steps carefully.

How Do You Enter a Beginning Bank Balance in QuickBooks Online?

To enter the beginning balance, you will have to perform a number of steps. However, it depends upon the cases if your credit card or bank account is connected with online banking or not. In case the beginning balance is missing, you can still enter the beginning balance by editing the details. In the following discussion, you will understand the whole procedure. Read on to know how to enter a beginning balance in QuickBooks Online:

Case 1: When the Bank Account is Connected with Online Banking

If you are wondering how to enter a beginning bank balance in QuickBooks if your credit card or bank account is already connected with online banking then you don’t have to worry about this. QuickBooks will download the historical transactions automatically up to a specific date. Therefore, you don’t need to enter the beginning balance as QuickBooks will automatically total up the amount and enter it along with the date. However, you will have to enter the beginning balance manually if your bank account is not linked with online banking.

Case 2: When the Bank Account is Not Connected with Online Banking

Some users do not connect their bank account with online banking. In such a scenario, you will have to add the beginning balance manually. Let’s find out how to enter beginning balance in QuickBooks Online if the bank account is not connected with online banking:

  • To get started, you need to ensure that you remember the amount to enter for the opening balance. You can add the beginning balance for the account you had already or just started at the real-life bank account.
  • Then, navigate to the “Settings” menu.
  • Click on the “Chart of Accounts” option.
  • Select the “New” button.
  • After this, type the “Name” for your account. Also, mention the “Account Type” and “Detail Type”.
  • Here, you can mention other details, e.g., the default tax code.
  • At this point, you can select when you would like to start tracking the finances.
  • For this, you can go to the “Balance” field and add the amount. Also, check the “As of” date. Remember that if you want to track immediately then you need to add today’s date.
  • Press the “Save and Close” button.

As you implement these steps for entering the beginning balance, QuickBooks starts tracking the transactions that come after your beginning balance date. Now you have learned the whole procedure of QuickBooks enter beginning bank balance.

Tip: If you want to add transactions older than the beginning balance then you can simply edit the start date and its balance. This will set up a new starting point. In addition, QuickBooks will not count such transactions twice. All you have to do is check the beginning balance, compare the beginning balance with the real-life bank account and then review the history. This will also make your reconciliation easier.

What If Beginning Balance is Missing in QuickBooks Online?

There can be occasions when you create a new account in QuickBooks and continue tracking transactions straight away. At such moments, you may forget or skip to enter the beginning balance. If that is the case, you can add the beginning balance later. All you have to do is check the opening balance entry and then create the Journal Entry. Later, you can mark your journal entry as reconciled.

Please Note: These steps should only be followed when you have not reconciled your account yet. If you have already reconciled the account, this becomes tricky to enter the beginning balance. Reach out to the accountant in such situations.

Step 1: Check the Account Balance

Before proceeding further, you should check the account register to ensure that you don’t have the opening balance. After verifying this, you can perform the following steps:

  • Select the “Accounting” menu.
  • Then, click on the “Chart of Accounts” option.
  • After this, select the account and click on the “Account history” using the “Action” column.
  • Here, you can look for the opening balance entry:
    • In the “Payee/Account” section, you should see the “Opening Balance Equity”.
    • The “Memo” column should have the “Opening Balance”.

If you find the opening balance entry, you should not go further. All you have to do is note down the amount and date. Then, you can use the bank statements to be sure that your opening balance is right.

However, if you don’t spot any opening balance entry then you should note down the amount and date of the oldest transaction available in your account.

Step 2: Prepare the Journal Entry

When you don’t find the opening balance entry, you can create the journal entry. Later, you can mark this journal entry as reconciled. To prepare the journal entry, you can look down the following steps:

  • Click on the “+New” menu.
  • Then, select the “Journal Entry” menu.
  • After this, you can add the date. The date should come before your oldest transactions in an account. This will be counted as your opening balance date.
  • Now, go to the “Account” drop-down menu (on the first line) and pick the account for which you wish to add the opening balance.
  • Move to the “Description” field and enter the note so you will be aware of why you created this journal entry.
  • After this, go to the “Account” drop-down arrow (on the second line) and click on the “Opening Balance Equity” option.
  • Here, you can use the bank statements to add your opening balance. Make sure you add the balance of the real-life account only for the date you chose as your opening balance.
  • Once done, you can add the credits and debits depending on the account type you added on the first line:
    • Asset and Expense Accounts: On the first line, go to the “Debit” section and type the opening balance. After this, you can add the same amount in the “Credit” section (on the second line).
    • Equity, Liability & Income Account: In the “Credit” section (on the first line) and type the opening balance. After this, you can add the same amount in the “Debit” section (on the second line).
    • Accounts Payable: In the “Name” section (on the first line), you can pick the supplier to whom you owe money. After this, you can add the opening balance as the credit to increase a balance. Alternatively, you can add the opening balance as the debit in order to decrease a balance. Once done, you can go to the opposite section and add the same amount in the second line.
    • Accounts Receivable: In the “Name” section (on the first line), you can pick the customers to whom you owe money. Then, you can add the opening balance as the debit in order to increase a balance. Alternatively, you can add the opening balance as the credit in order to decrease a balance. Once done, you can go to the opposite section and add the same amount in the second line.
  • After adding all the necessary details, you can press the “Save” button.
  • Now, you can use the bank statements to add the balance of the real-life bank account. Make sure you add the balance for the date you selected.
    • If you see a positive balance then you should add it in the “Debit” section.
    • But, if you find the balance negative then you should add it in the “Credit” section.
  • Then, go to the “Description” section, you can type “Opening Balance”. This will let you know why you created this journal entry.
  • Move to the “Account” drop-down menu (on the second line) and choose the “Opening Balance Equity”. Doing so, the “Description” section will automatically populate.
  • After that, you can hit the “Save” button.

Now that you have prepared the journal entry in QuickBooks Online, you can mark this journal entry as reconciled. Know more in further detail.

Step 3: Reconcile the Journal Entry

If you have not reconciled the account, you can now reconcile the journal entry. This will prevent the account from showing up on the reconciliation in the future. Let’s find out how you can mark the journal entry as reconciled:

  • Click on the “Accounting” menu.
  • Then, choose the “Chart of Accounts” option.
  • Once done, you can locate the account and choose the “Account history” using the “Actions” section.
  • Now, look for the journal entry that you created. You can click on it to expand the view.
  • After this, click on the box available in the “Tick” column. Make you keep clicking until the “R” letter displays. This indicates the journal has been reconciled.
  • Later, you can press the “Save” button.

As you have already reconciled the journal entry so QuickBooks will not count it twice. In addition, it will not bother you when reconciling the account in the future. It will balance the accounts.

How Do I Enter a Beginning Balance in QuickBooks Desktop?

To enter the beginning balance for the accounts, you will have to add the opening balance first. Thereafter, you need to verify the opening balance entry in your QuickBooks Desktop account. Let’s find out how to enter beginning balance in QuickBooks Desktop:

Step 1: Add the Opening Balance

To enter the opening balance, you are required to create a bank account and then enter the opening balance. Thereafter, you can check the entry of the opening balance to make sure it is accurate.

Add the Credit or Bank Account

Before adding a new bank account on the Chart of Account, first, you will have to be sure about what you need to enter for the beginning balance. For instance, you can add the beginning balance for the account you had already or for the real bank account that you just created.

  • To start, you need to get your bank statements. For this, you can sign in to the bank’s website.
  • Once you prepare the bank statements, launch “QuickBooks Desktop”.
  • Then, click on the “Company” menu.
  • After this, go to the “Chart of Accounts” option.
  • Here, you can click right anywhere on the screen.
  • Now, hit the “New” button.
  • Select the “Credit Card” or “Bank” as the account type.
  • Press the “Continue” button.
  • At this point, you need to set the name of the account. If you are having more than one account of the same type for the same bank then make sure you enter a unique name. This will help you to recognize the accounts easily.
  • Once done, you can complete the remaining data fields.
  • Now, go to the “Enter Opening Balance” option and edit the opening balance if required. All you have to do is click the “Change Opening Balance” button.

Add the Beginning Balance

Once you create the bank account, the next is to add the beginning balance. This should be noted that adding the information as an opening balance totally depends on how you would handle the earlier transactions. Read the following instructions:

If you have no plan to enter the past transaction that comes up before the date of opening balance then you should do the following:

  • Mention the ending date as well as the ending balance. You can use the details from your recent bank statement.
  • Then, press the “OK” button.

By doing so, QuickBooks will summarize all the old transactions. After that, you can continue to track your new transactions.

On the other hand, if you are willing to enter the old transactions in QuickBooks, you should follow these steps:

  • Before getting started, you need to determine how far you prefer to go back.
  • Then, select the date which should be older than your earlier transactions you would want to track. Here, the opening balance will summarize the details before the date you choose.
  • Now, go to the “Ending date” section and add the date you choose.
  • After this, move to the “Ending Balance” and type the real-life account balance for that specific date.
  • Once done, click the “OK” button. This method will prevent counting the old transactions twice.
  • Hit the “Save & Close” button. By doing so, you can easily record your beginning balance.

Now you have created your new bank account and recorded the beginning balance in your QuickBooks Desktop account. If needed, you can add the beginning balance for other account types such as the asset, liability, and other accounts.

Step 2: Verify the Opening Balance Entry

Once you have entered the beginning, you should verify the account register to determine if it is accurate. Remember that the Opening Balance Equity account doesn’t have any remaining balance.

To verify this, you can do the following:

  • Navigate to the “Lists” menu.
  • Then, select the “Chart of Accounts” option.
  • Now, you can start searching for the “Opening Balance Equity” account. Once found, you can open it.

At this moment, you should see your balance of 0.00. If it is not 0.00 then you are required to mention the remaining balance. After doing so, you can launch the Balance Sheet Report for the prior year.

  • Select the “Reports” menu.
  • Then, hover your mouse over the “Company & Financial” option.
  • Now, click on the “Balance Sheet Standard”.
  • Choose the “Last Fiscal Year” by clicking on the “Dates” drop-down arrow.
  • After this, go to the “Equity” section and select the “Retained Earnings” balance.

After performing all these steps, you are required to compare both the remaining balance and the Retained Earnings balance of the previous year. This can be done in the Opening Balance Equity account. After the comparison, if you find the balance matched, it means the data is balanced. By any chance, if the balance falls to match then you need to contact your accountant immediately.

Conclusive Words

Keeping your balance accurate is necessary as it makes the reconciliation process easier. When you add the opening balance, this summarizes all your transactions that come before this. By adding the same amount to your QuickBooks account, you can match the bank records from the beginning. To avoid any kind of confusion, we have explained how to enter a beginning balance in QuickBooks Online and QuickBooks Desktop. We hope you find this useful. In case of any difficulties, connect with your accountant.

Do you want to set up the cash disbursement journal and download the bank statements? Read these guides for help:

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