Step 5: Entering balances from a previous system

Assets, Liabilities, and Equity

Using your Balance Sheet Report: Enter all Assets & Liabilities except for A/R, A/P, bank and credit card accounts with any uncleared or new transactions, and inventory.

Create an Adjusting Entry and:

• Assets - Enter beginning balances in Opening Balance Equity account offsetting to the individual asset accounts.

• Liabilities - Enter beginning balances in Opening Balance Equity account offsetting to individual liability accounts.

• Equity - Enter beginning balances in Opening Balance Equity account offsetting to individual equity accounts.

• Note: For Retained Earnings – Create an account in the Chart of Accounts called “Prior Retained Earnings.”  Enter the beginning balance in Opening Balance Equity account offsetting to Prior Retained Earnings. In WorkingPoint, retained earnings are calculated automatically for you and will post to an internal account called Retained Earnings.

Bank and Credit Card Accounts

The next step requires data entry for the detail that makes up the bank account balance if you want to track your uncleared transactions individually in WorkingPoint.  Note: there is no way currently to reconcile your accounts in WorkingPoint so this step is completely up to you. Alternatively, you can enter a lump sum for your bank accounts.

Using your bank and credit card reconciliation report, from your individual bank and credit card accounts:

1. Use Deposit to enter your starting balance with the total offsetting to Opening Balance Equity account. In QuickBooks, the “Cleared Balance” from the last bank reconciliation will be your starting balance.

2. Next, enter the Uncleared Transactions and the New Transactions for checks, payments, and deposits using Deposit or Record Payment/Purchase as needed. The bookkeeping account will be Opening Balance Equity.

3. The ending balance of the account should match the current balance or QuickBooks Ending Balance.

Accounts Payable

Using the A/P Aging report or Unpaid Bills report:

• Enter all open bills as individual bills with the total amount of the outstanding bill assigned to the Opening Balance Equity bookkeeping account. Make sure the date, due date and bill number match the original bill.

• Result: Your previous A/P aging report should match the account balance for A/P.

Accounts Receivable

Create a Beginning Balance item in the Items List with the revenue account set to Opening Balance Equity.

Then, using the A/R Aging report or Open Invoices report:

• Enter all open invoices as individual invoices with the total amount of the outstanding invoice charged to Beginning Balance item. Make sure the date and invoice number match the original invoice.

• Result: Your previous A/R aging or summary report should match the account balance for A/R.

Income Statement (aka Profit and Loss)

Using the Income Statement report, create an adjusting entry and enter balances for individual income and expense accounts and offset the total to the Opening Balance Equity account.

• Depending on the day of the cut-over, different dating scenarios will affect the accuracy of the PNL.

• If cut-over is 01/01/09, enter beginning balances on 12/31/08 for report ending 12/31/08. This will keep the PNL for January accurate and bring over the prior balance for previous month.

• If the cut-over is 02/13/09, enter balances from report run from the beginning of your fiscal year to 01/31/09 and enter on 01/31/09 and then run a report for February month to 02/12/09 and enter on 02/12/09.

Inventory

See Step 6: Import Items (link is below)

Opening Balance Equity

The Opening Balance Equity account balance should be zero at the end of all the adjustments. What is the Opening Balance Equity account?