Setup Guide: Entering Opening Balances

Beginning balances must be entered for each account, including bank accounts, credit card payables, and equity accounts.

If you have an existing system, print the Trial Balance report as of your conversion date and use it to enter your opening account balances in Sage Simply Accounting. If you are converting from a manual system, or your records are not as well organized as you'd like, consult your accountant for assistance.

Tips:

• If you are starting out in Sage Simply Accounting at the beginning of your company's fiscal year, all income and expense account balances will be zero.
• If you work with foreign currencies and have set up your currency options in Sage Simply Accounting, you will be able to enter foreign account balances and exchange rates.

In every accounting transaction, total debits must equal total credits. When you enter an opening balance for an account, you are entering only half of the transaction - the debit or the credit. For example, if you received a bank loan of $ 25,000 to start your business, you would enter an opening balance of $ 25,000.00 in your Bank account (as a debit, or increase in an asset). To balance your books, you would enter an equal amount in your Bank Loans Payable account (as a credit, or increase in a liability).

When you enter opening balances in Sage Simply Accounting, the total amount of your debits should equal the total amount of your credits. If they don't, Sage Simply Accounting enters or posts the difference between the two to the Retained Earnings account.

Tip: If you have an existing business, you may already have an opening balance in your Retained Earnings account, so you should review this account's balance after you have finished entering opening balances for all your accounts.

As you set up your existing customer list in Sage Simply Accounting, you specify how much each customer owes you.

Vendor list setup is the same. When you set up your vendors, you specify what you owe each vendor. For example, if you tell Sage Simply Accounting that you owe Vendor ABC $ 100.00, then Sage Simply Accounting knows that this $ 100.00 balance represents an account payable.

If you enter opening customer and vendor balances in the Setup Guide, Sage Simply Accounting can automatically calculate and update your:

• Accounts Payable opening account balance, by summing the amounts you owe all your vendors
• Accounts Receivable opening account balance, by summing up the amounts all customers owe you

Note: By default the amounts are calculated according to the latest transaction date. If you wish to display amounts by session date, you need to turn on the Session Date option in the User Preferences.