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Powder Girl
February 14, 2022
Question

Opening Balance in Quickbooks online

  • February 14, 2022
  • 1 reply
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In March 2021, my boss switched from QB Desktop to QB Online.  It looked as though everything moved over correctly initially.  The account was reconciled the first full month (April), but not after that.  Fast forward to January 2022, the accountant needs the reconciliation report for December 2021 (there isn't one) and when I attempt to reconcile the account, it is showing that the beginning balance is off by $30,000+!  I have followed the tips through QB Online and see that there was no "opening balance" entry made.  The very first statement for this account shows an opening deposit, which matches the first transactions made in January 2020. and it appears that this account was reconciled correctly up through April. There are many more issues with reconciling this account.  However, can I get some advise on this first?  Do I still need to enter some sort of "opening balance" entry in the journal? Unfortunately, I am not an accountant so I need everything explained in very simple terms.  

1 reply

L
LeizylM
February 14, 2022

Hi there, Powder Girl.

 

I'm here to make sure you'll be able to correct the opening balance in QuickBooks Online.

 

Each time you start reconciling an account, you review the beginning balance in QuickBooks. It's the amount in the account at the beginning of the time period you're reviewing.

 

The beginning balance amount should match what's on your bank statement for the same start day. That being said, you can fix the opening balance by entering or editing the balance of your real-life bank account.

 

Here's how:

 

  1. Select the Accounting menu, then select Chart of Accounts.
  2. Find the account on the list.
  3. Select View register.
  4. Search for the opening balance entry. It should have "Opening Balance Equity" in the Account column.
  5. Take note of the date and balance.
  6. Next, you need to compare the opening balance with your real-life account.
  7. Sign in to your bank's website, or find your bank statement.
  8. Check the account's balance for the same day as the opening balance in QuickBooks.
  9. Compare the two balances.

 

If the opening balance in QuickBooks doesn't match your bank records, you can proceed to Step 3 in this article on how to correct it:  Fix issues the first time you reconcile an account in QuickBooks Online.

 

However, if there's no opening balance entry, you'll have to use your bank statements to make sure the opening balance is correct. Then, take note of the date and amount of the oldest transaction in the account. Once done, you'll need to create a journal entry for this. 

 

  1. Go to the +New button.
  2. Select Journal entry under Other.
  3. Enter a date that comes before the oldest transaction in the account. This will be the opening balance date.
  4. On the first line from the Account drop-down menu, select the account you want to enter the opening balance for.
  5. We recommend adding a note in the Description field so you know what the journal entry is for.
  6. On the second line from the Account drop-down menu, select Opening Balance Equity.
  7. Use your bank statements to enter the opening balance. Note: Enter the balance of your real-life account for the date you picked as the opening balance.
  8. Enter the debits and credits based on the type of account you entered on the first line.

Also,  I'd recommend reaching out to your accountant for further advice on fixing the beginning balance issue in QBO, especially when creating a journal entry.

 

For additional details and tips, feel free to check out these resources:

 

 

Leave a comment below if you have other concerns regarding the chart of accounts or opening balance. The Community and I will be around to help you. 

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