Quickbooks 2021 Tutorial for Beginners- How to Enter Opening Balances When You Have Been in Business
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- čas přidán 1. 07. 2024
- QBUniversity.org - In this Quickbooks 2021 tutorial for beginners on how to enter opening balances when you have been in business, I walk through the right and BEST way to enter opening balances in Quickbooks accounts when you have already been in business.
I get this question all the time - what if we have been in business, how do I enter opening balances for accounts in Quickbooks? The standard way in Quickbooks is to simply create your accounts and enter the opening balances. This way distorts your balance sheet because it plugs the balance to Opening Balance Equity, which is a plug account.
The right way is to do a journal entry and adjust your balances - this video shows you how to enter your opening balances when you have been in business. Step-by-step I walk you through how to do it correctly.
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Hi sir,
Most of the videos and explanation you find on the internet concerning the opening balances of the balance sheet accounts deals with situations where you have information for the previous closing balance.
However, when dealing with the small business sector, sometimes you are provided with incomplete records or no records at all. some clients may not keep proper records of balance sheet items and have no prior balances for assets purchased and depreciated, money invested into the business and mixed up bank accounts. How does one go about to create balance sheet accounts if they have no prior records but have already been in business for a while?
THIS is exactly what I needed. Very clear instructions and explanations. Thank you!!
You’re welcome!
This video has saved me a lot of grief and aggravation. Thank you very much
Awesome! You’re welcome!
Thank you! Exactly the information I was looking for! Well done and expertly made video.
You’re welcome!
Brilliant - thanks for actually teaching this. I've been away for bookkeeping for some time and have been searching for the way I use to open existing balances and this is how I used to do it. I've looked at a lot on youtube and none of them seemed right until this. Subbed....I want to get back to the job I loved.
That’s fantastic! Thanks for the kind words!
So very helpful!❤ thank you!
You’re welcome!
Good sharing true learning
Awesome thanks!
Do you need to make an adjusting entry to clear out the revenue and increase the equity back to the original balance sheet
Hi, Could you tell me how I set up a project's estimate(proposal amount) and the remaining budget(estimate) when I start over the QBs desktop version at the beginning? Thank you.
Good days sir. Please sir when creating my company, I have entered an opening balance which created an equity account. Is it appropriate that the money sits in the equity account or is there something I need to do on the equity account?
Really like this video! Very helpful. I have a question about the P&L balances. Should I just add the net income amount to retained earning account, without entering individual P&L balances?
For past information yes but not for a current PL
Thank you for this video! Very informative and you explained each step with accuracy. I only have one question: Once you entered the opening balances in each account, will the business start recording transactions as of 1/1/2020 or 1/1/2019?
I don’t recall the example I used but you would start entering transactions the day after the ending balance sheet. So if the balance sheet entered is 12/31/20, start entering as of 1/1/21
Hi - thanks for the tutorial! Great help. Aside from one a/p the CA's set up each year, I don't have a need for this module. I was going to setup a y/e a/p account to capture their invoice but I'm unsure which liability account - Account Type / Detail Type. Your thoughts?
I’m kind of confused as to what you are asking. If it’s a bill you owe then I would put it to Accounts Payable
This is a great video and the presentation and explanation is excellent. Thank you! Reconciling for the 1st month. The 'opening balance' on the recon screen is zero - ok as there is a an opening entry in the recon screen per the videlo. After reconcilation, I still have a difference which equals exactly the prior month's statement balance which would have been the 'opening balance' . How do I correct this? Thank you!
When I check off the opening entry in the reconciliation screen --> the difference is the amount that was added for the uncleared transactions from the prior year.
In these GJ entries, you are not using classes. We are a nonprofit and use classes to track funds. How do I enter those pre-existing opening fund balances?
This video is a lifesaver....I have been searching for this answer for days as I could not find any help on how to input the Opening Balance for Retained Earnings in QB! For clarification, you are creating a balance sheet for 2019 (previous business history not in QB) and the new year in Quickbooks to start recording is 2020, correct? I was a bit confused because the date on the balance sheet in your Excel example is 2018. I am assuming is should be 2019?
Thank you so much and I will see you in the future!
Yes! That’s exactly right!
This was very informative but I am wondering when entering the uncleared checks if it is ok to link them to an expense account due to the fact that they were expensed out in the previous year. Or because you backdated it to the previous year it will not affect your profit and loss for the current year? Thank you for posting your videos. I have subscribed and will continue to watch others as your explanations are very clear.
That should be fine. The whole reason to get it in the prior year is to be able to clear it now and have retained earnings balance
Thanks for this video. I have a question: I've been using QuickBooks Desktop for 2021 and 2022 but never set up equity accounts fully. Can I do that now with my 2022 Balance Sheet or should I go back to 2021? I would like to try to match QB to the TurboTax Balance sheet.
You could do it for 2021. It won’t change any income or expense on the tax return
Thank you for this helpful video. I am assisting in setting up Quickbooks Desktop 2021 for a very small charitable organization (church) that has been in operation ("in business") for awhile. As far as the Liability & Equity Section of the Balance Sheet, I only needed to enter Retained Earnings. My understanding is that when the fiscal year has ended (December 31st), the net income showing on the Balance Sheet would automatically be added to the Retained Earnings on the first day of the the new fiscal year (January 1st). What I found was that the amount assigned to Retained Earnings as the opening balance remained the same on January 1st of the new fiscal year, and the net income of the previous year appeared as Unrestricted Net Assets on January 1st. And so it seems that I now have two different Retained Earnings accounts - one titled Retained Earnings that represents the Opening Balance, and one titled Unrestricted Net Assets that represents the Retained Earnings generated via Quickbooks. Is there anyway that I can make these two accounts one? I did not find an Equity Account "Unrestricted Net Assets" on my Chart of Accounts. Thank you for your help.
Hello sir,
Can you please tell me how to record opening balances of customer or supplier partially paid invoices
I just moved to quickbooks in the middle of my fiscal year.
And also what account’s opening balances should i put on.?
In general when you set up a new customer or vendor it’ll ask you, or you can enter in the set up, the existing balance for a customer. It’ll put that balance to opening balance equity
Will making these type of journal entries help with getting the correct negative balances if someone stopped using QB mid-year in 2019 but restarted in 2022?
It’ll help but be a little trickier. You may need to start a whole new file or bridge the gap between ending balances and the new balances
Thank you for the great video! I have one question, I entered my balance sheet with journal entries, however when I went to reconcile the bank account it is showing a zero beginning balance?
It’ll do that because of the journal entries. Go ahead and reconcile and you should see the journal entry as an item to clear. Go ahead and clear it and you should be ok
This is a great video! My BS shows the correct opening balance as does RE. But when I go to reconcile the account the beginning balance is zero :( any suggestions? Thank you
You should see that opening entry on the recon screen. I would check that off as part of your recon
Thank you for the informative tutorial. You're the best! I followed everything and when I click to save, it prompted "general journal transactions require an account on each line with an amount." Then my quickbook shuts down. How do I override this from happening?
Thanks! In the journal entry you need to have an account on each line. Make sure this is the case otherwise you’ll get this error. You may have left of Retained Earnings? As far as it shutting down…not sure. Sounds like a software issue?
Thank you! I'm at my deadline today and this video just saved me from making some crucial mistakes. Question: When you say enter your AR invoices exactly with the correct account/items, what about sales tax? I wouldn't think I should enter the sales tax as sales tax since most has already been paid and I wouldn't want it populating in my Sales Tax payable account. If that's correct how do I record the sales tax on the invoice so my total invoice amount is correct? As a misc cost?? Thanks in advance!!
That’s a great question! I think Misc cost should work so that when it’s collected it should offset that to zero
@@QbuniversityOrg Thanks for the quick response. Follow-up question: Is the detail in the AR invoice really needed as long as the total is correct? Asking because most invoices are pretty detailed to different income accounts and I have 1050 invoices to enter. I would imagine the reason for doing it this way is so it doesn't hit the Opening Balance Equity account, but really all accounting info for 2022 is coming from old software so everything in QB for 2022 is irrelevant.
@@Tammy-zc5gy nope you don’t need all the detail just the total really
Hello! thank you so much, everything makes more sense now. So, what if I don't have a balance sheet from previous year? In this case I only have assets (building) and long term liabilities (mortgage) how would you figure those beginning balances on QuickBooks?
I would enter those at the cost basis for the building, any accumulated depreciation, and the liability, then put the difference to equity
@@QbuniversityOrg Thank you!! That's what I thought but wasn't sure. I appreciate your response
@@annaboada1741 welcome!
Opening receivable balances are the income for previous accounting period,
Yes in general if you are on accrual basis
If your company didn’t enter opening balances correctly at the beginning of the year can this be corrected at the end of the year before closing year out?
Yep it sure can
Doesn't make sense. Aren't the expenses being double entered? Same with AR? I have a TB as of Dec 31, 2022. This TB has both B/S and I/S amounts. If I record all of the Y/E balances, then record My AP and AR listings again I am double recording these to achieve an opening balance? Can some one get back to me on this?
You don’t record the IS amounts as opening balances, just the balance sheet
Hi, Sir, how to enter opening balances in later time after creating accounts and add some transaction to that particular account ? ( mistakenly not enter the opening balances but entered transaction without opening balance)
You could do a journal entry to do that
I am trying to set up Quickbooks for a new company, however, I have a year of purchases on equipment, and inventory items that I made with personal funds prior to start of business. How and where do I enter and account for these. Would hope to recoup costs as business grows.
Watch this czcams.com/video/bcrnsDLNu7w/video.html
what do i do if my beginning balance is wrong? can i start all over again? how do i determine the cutoff date for month end closing?
You can start over. What account is it? The cutoff date is usually going to be a year end
I started a small business last October and I was not keeping much records. As at now, I don't know the current values of my fixed assets but I have my current debtors' figure as well as creditors' figure. How do I record my balances in quickbooks in order to best capture my financial image. I do have my for-sale inventory figure too.
Seach google for your asset model number and use the cost
we already finished inputting the current source docs. but we have not make the journal for the opening balance? how to remedy this. Tnx
You need the last year end balance sheet. If you have that then you can do the journal entry
Hi there, Thank you very much for this! I want to ask you a question. Do you happen to know what is the journal entry whenever a cash account is not to be used anymore? Say there is a $130 balance on QuickBooks and my client tells me that this balance is to be zeroed out. What is the debit entry to do this? I know credit is the cash account. Let me know your thoughts.
Depends on the amount but if it’s relatively immaterial we just put to Misc Expense or some other expense account
@@QbuniversityOrgInteresting. What would be considered immaterial? The client from what I can tell has money in his other accounts like $50K I think. I can't find this type of video where one posts into expenses when they are immaterial. Having said this you have great videos. Appreciate your assistance, let me know about what would you consider to be immaterial in your opinion. The amount in question that my client has is 130 bucks.
Materiality is a judgment call to be honest but $130 sounds pretty immaterial to me
im starting a new quickbooks file 1 month into the new year. is there a video on adding income and revenue balances?
Thanks
In general if you are only a month into it I wouldn’t enter opening balances for income and expenses. I would go back and add deposits and expenses directly in the check register as income and expenses, as appropriate.
@@QbuniversityOrg We had over 1000 transactions, so that is not really possible. Is there a j/e i can do?
@@glennvaughan9771 unfortunately for a journal entry you are going to need to know the totals of all the activity. For example if there was $4,026.45 Office Supplies expense you would need to know this to put in the journal entry.
While qbo shows these balances as income, for current accounting period, how to adjust it?
Depends on if you are cash or accrual
If i sell something with taxes included, how can i get quickbooks to extract or calculate the taxes
You have to set up sales taxes in QuickBooks
I just started using QBO. I need to record my starting Inventory value as of 1/1/2024. I'm not using the Inventory features in QBO. Meaning I'm not recording individual inventory items, quantities and values. I just want to record the total value of my inventory. What's the best way to accomplish this? Thank you.
I would do a journal entry, debuting, inventory, and crediting opening balance equity
@@QbuniversityOrg Awesome. Thanks very much. I've just read that it's best to close out the opening balance equity account after doing this. What's your preferred method for doing so?
@@JamieWardHDit really depends but most times we close it to retained earnings so that retained earnings from the prior year rolls forward
When I entered my accumulated depreciation in general journal, it did not show up in my balance sheet but I see it in the general journal?
Make sure the dates are all right on the balance sheet and in the entry. Also make sure you have the Account set up as a fixed asset accoint
@@QbuniversityOrg Thanks but I've tried 3 times to no avail. I have cost net of land in amt of 381,094 and accumulated depreciation of (299,854). It represents assets going back many years. Its from my TT dep. tables totals.
@@raekc4839 unfortunately it’s something you’ll have to troubleshoot. There has to be a reason. Check your chart of accounts. Accumulated Depreciation is not somehow inactive is it?
I believe I am missing a step.
1. Download the bank feed
2. When I map income transactions to the COA Service and save, the amount does not increase in the bank register.
What am I NOT doing to get the income transaction amount reflected in the bank register?
My QB Desktop Pro 2021 shows a negative (-$105,238 in Red) in my bank account.
Go into one of those downloaded transactions and see where it’s pointing. If income is going up it’s crediting the income account, like it should, and the debit would be to the bank account. Where is the debit going?
@@QbuniversityOrg
I will look into this now.
Kind Regards.
@@robwin0072 awesome!
I just tried your link to ask a question and it is no longer working. Please tell me you have a new link?!
Which link?
@@QbuniversityOrg the one above is working for me now, thanks!
@@kimruff9439 awesome!