When should you change the opening balance in QuickBooks®Online?
Disclaimer: Always seek the advice of a CPA and/or an accounting professional before making any changes to your opening balance. The following is intended for general information purposes only and does not replace the counsel of a professional.
Before changing the opening balance of a bank account, which is not normally recommended, it’s prudent to consider the situations that it might be necessary.
- To make a correction in the event the existing opening balance is inaccurate.
- If an account was set up without an opening balance then one must be added.
- To reflect the addition of historical account information being added to an account.
In the situation where a correction to an existing opening balance is necessary …
First identify the account within the Chart of Accounts (COA), then run an ‘All Dates’ report on the account. The ‘earliest posted deposit’ is noted as the Opening Balance. Enter new opening balance date under the ‘date field’ > Click add funds to this deposit > Enter the new balance under the ‘amount column’ > Save and Close (more info)
What if an opening balance is missing on an account? How do you add one?
Intuit suggest three options i) create a new bank account and merging the old one into it reflecting the new opening balance. ii) Use opening balance equity to offset a deposit into your bank account. iii) use a journal entry “that debits your bank account and credit Opening Balance Equity.” (more info)
To add historical data to an account and reflect the new opening balance.
In a situation where the data recorded exceeds 90 days, an opening balance should be changed using one of the above mentioned methods. However, when you first add an account into QuickBooks® Online you can download up to 90 days of transactions. The first entry is the Opening Balance and ‘by default is mark reconciled’. (more info)
Do you need help cleaning up your QuickBooks®? Contact Chris directly at 360-303-5798 to schedule your free consultation.
