Setting up opening balances

These are entered or imported using a special Analysis Code, where both sides DR. and CR. are posted to the Suspense Nominal Account, and use VAT Code 8 (Outside scope of VAT).
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To help with this, a default Analysis Code can be set up when creating a new Data file. This will provide both a Sales and Purchase Analysis Code called ‘O/BAL’.
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This article covers the following:

Transferring opening balances records your starting position. Before you start, obtain a full set of reports from your previous system — particularly the Trial Balance and Profit & Loss. Balances can be entered manually or imported. The method depends on the number of balances involved.

Opening Balances in the Sales and Purchase Ledgers are input in the same way as other transactions, but they are analysed to a special ‘Opening Balance’ Analysis Code that posts both the Debit and Credit to Suspense, thus they have no effect on the Nominal Ledger.

Enter Nominal Ledger opening balances after customer and supplier balances. Use journal entries — not VAT journals. Print a Trial Balance to compare against your previous system. Opening balances are entered in the period prior to your first trading period and rolled forward, to avoid confusion with current year reporting.

Although SOP and POP do not directly affect your accounts, it is important to record outstanding orders and stock levels accurately. Unfulfilled sales and purchase orders can be entered as new orders. If orders are part-delivered or part-invoiced, only enter the outstanding quantity. If the quantity to deliver does not match the quantity to invoice, process a delivery note or invoice and post a stock movement or credit adjustment to correct the position.

Opening balances are entered as Stock Movements, with their transaction type set to ‘Opening Balances’.

Opening balances are entered as Miscellaneous for Opening Cost transactions and Sales for Opening Sales transactions.