When you open a new QuickBooks account, you may be asked to provide your opening balance. This balance is typically in the form of a check or money order. You can use this balance to pay your initial bill, or to deposit money into your account.
Quickbooks 2020 Tutorial for Beginners – How to Enter Opening Balances for Accounts[ytvideo]
What is an opening balance in QuickBooks?
An opening balance is the initial balance of an account in QuickBooks. This balance is usually the sum of all the transactions that have taken place in the account since the last time it was updated.
Why is it important to enter an opening balance?
There are a few reasons why entering an opening balance is important.
The first reason is that it allows you to track your business’s historical financial position. This is important because it can help you to monitor your business’s growth and performance over time.
The second reason is that it can help you to plan for your business’s future. If you know your business’s historical opening balance, you can use that information to estimate your business’s likely future cash flows. This can help you to make decisions about how to allocate your business’s resources.
The third and final reason why entering an opening balance is important is that it can help you to verify your business’s financial statements. By verifying your business’s financial statements, you can ensure that your business’s financial information is accurate and complete.
How to enter an opening balance in QuickBooks?
Opening balance is the first entry in the QuickBooks Balance Sheet. It reports the cash and account balances that are associated with the company’s accounts receivable, accounts payable and inventory.
Entering the opening balance in QuickBooks is easy. Just open the company’s Balance Sheet and click the “Open Balance” button. Then enter the net cash and account balance from your bank statements or other reliable sources.
What happens if you don’t enter an opening balance?
If you don’t enter an opening balance, QuickBooks will generate a default balance of zero for your account. This is usually okay, but it can lead to some unexpected consequences. For example, if you have a large balance in your account and you don’t enter a balance, QuickBooks will treat that balance as if you had deposited it all at once. This might cause your account to show a negative balance, which could cause you to have to pay taxes on that money.
Tips for entering your opening balance in QuickBooks
First things first, open QuickBooks and create a new company file. From the File menu, select Accountant. In the Accountant window, click the Company Preferences tab. The opening balance section is on the left side of the window.
In this section, you’ll enter your company’s initial cash and account balances.
The first step is to enter your company’s cash balance. This is the amount of cash you have on hand.
To enter your company’s cash balance, click the Cash button and then enter the cash amount in the Cash box.
Next, you’ll need to enter your company’s accounts receivable balance.
To enter your company’s accounts receivable balance, click the Accounts Receivable button and then enter the accounts receivable amount in the Accounts Receivable box.
Next, you’ll need to enter your company’s inventory balance.
To enter your company’s inventory balance, click the Inventory button and then enter the inventory amount in the Inventory box.
Next, you’ll need to enter your company’s fixed assets balance.
To enter your company’s fixed assets balance, click the Fixed Assets button and then enter the fixed assets amount in the Fixed Assets box.
Finally, you’ll need to enter your company’s current liabilities balance.
To enter your company’s current liabilities balance, click the Current Liabilities button and then enter the current liabilities amount in the Current Liabilities box.
In general, the quickest way to see your current balance in QuickBooks is to open the Accountant Desktop, select the company name, and then click the Balance tab.