How to create and adjust the Opening Balance Equity

Ensuring your account matches with your bank balance is very important, KZ777. I'll share some steps you can perform to create an Opening Balance Equity and deal with your concern.

Please know that adding or changing the opening balance can affect the reconciled account and cause discrepancies in future reconciliations. Since you've reconciled your account without entering one, this will create a difference between your bank and QuickBooks balances.

Thus, the best way to resolve this is to undo all the reconciled transactions and create a Journal entry (JE) to record it. I also recommend seeking assistance from an accountant to help you with the undoing process and entry creation. You can invite them to undo the entire reconciliation using the QuickBooks Online Accountant version's Undo reconciliation feature to unreconciled entries in batches.

Here's how to manually unreconciled transactions:

1. Go to Transactions, then select Chart of Accounts.
2. Find the account for the reconciled transactions, then click View Register.
3. Look for the transaction that you want to unreconciled, then in the check column, keep clicking the R status until it shows as blank.
4. Press on Save, then choose Yes in the confirmation window.
   
   

Once everything is unreconciled, proceed with recording an entry. These are the steps:

1. Click the +New button, then select Journal Entry.
2. Enter the Opening Balance Date.
3. Choose the account to enter the opening balance in the first line item.
4. In the second row, pick the Opening Balance Equity.
5. Provide the debits and credits based on the type of account you entered.
6. Click Save & Close.
   
   

I'll leave this article for more details about the process: What to do if you didn't enter an opening balance in QuickBooks Online.

Additionally, I will attach some helpful links to guide you further in addressing issues when reconciling an account in QuickBooks Online:

• Enter and manage opening balances in QuickBooks Online.
• Fix issues at the end of a reconciliation in QuickBooks Online.
• Fix issues for accounts you've reconciled in the past in QuickBooks Online.

We're always available if you need more assistance managing your accounts in QuickBooks Online. Just leave a reply below if you have any further questions.

Hi, KZ777. I appreciate your careful approach to resolving the discrepancies between your bank and QuickBooks Online's (QBO) balance. Let me hop in on this conversation and help you further.

QBO only allows the creation of a singular account under the Opening Balance Equity (OBE) account detail type. If you can't create one, it's possible that it already exists and has been renamed in your Chart of accounts. I'm here to provide the steps to help locate it and suggest a process to resolve the discrepancies in the account.

Since we can't directly filter account names in the Chart of accounts, you can follow these steps to help locate the existing OBE account:

1. Go to the Gear in the upper right corner. Then, select Chart of accounts.
2. Select Run report.
3. For ease, click on Switch to classic view.
4. Choose Customize.
5. In the Filter section, place a checkmark for Account.
6. Type in "Opening balance equity" and select it.
7. Hit Run report.

After locating the account, we can create the Journal Entry (JE) to adjust the opening balance. You can follow these steps:

1. Go to the +New button.
2. Select Journal Entry.
3. Debit the bank account and credit the OBE account for the same amount.
4. For tracking purposes, enter details of the JE in the Description fields.
5. Hit Save and close.

However, since you've mentioned that the account has been reconciled without the opening balance, I recommend locating the adjustment entry QBO created to force the past reconciliations to balance. This is to account for the impact of past adjustments and help create the correcting JE based on these findings. For this, you can consider running a Reconciliation Report. Here's how:

1. Go to Reports.
2. In the search field, type in "Reconciliation report" and select it.
3. From the Account drop-down list, choose the bank account at issue.
4. Select the appropriate Report period.
5. Click on View report to locate the adjustment entries.

For more guidance, refer to this article on fixing issues for accounts you’ve reconciled in the past: Fix issues for accounts you've reconciled in the past in QuickBooks Online.

Just a disclaimer, I encourage collaborating with other accountants, especially on accounting for the adjustment entries before making significant changes to maintain accurate records.

If you need to run financial reports after this, let me add this article as a future reference: Run reports in QuickBooks Online.

We'll be here in the Community if you have further questions about adjusting your account's OBE in QBO. We're committed to offering ongoing support. Take care!