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Beginning Balances

Opening Balances for Customers and Vendors (As Of Fields)

How to Enter Opening Balances for Customer and Vendors

This topic offers additional details on how the Opening Balance feature works. This feature is only found in the customer and vendor forms.  This topic was designed for bookkeepers and accountants.

How to Use Opening Balances

This feature is not a required part of entering customers or vendors into Total Office Manager. The opening Balance feature was designed to allow you to quickly enter balances for customers and vendors without the use of a Journal Entry.

You MUST have ‘Accounting’ permissions to see or use Opening Balance feature.

When you enter a non-zero value and a date (which is preloaded) into the Opening Balance feature a Adjusting Journal Entry will be created for you <under the hood>.

You are allowed to enter a negative number . This would be necessary if YOU OWE the customer or the vendor OWES YOU.

These accounts cannot be changed. If you want to ‘Change’ Accounts or any other info you’ll have to open the JE form and manually adjust the info there.

Detailed Examples of the Adjusting Journal Entries

Vendor has negative balance <They owe us money>

Credit Account -> Opening Balance Equity

Debit  Account -> Accounts Payable

Vendor has positive balance <We owe them money>

Credit  Account -> Accounts Payable

Debit  Account -> Opening Balance Equity

Customer has negative balance <We owe them money>

Credit Account -> Accounts Receivable

Debit What Account -> Opening Balance Equity

Customer has positive balance <They owe us money>

Credit Account -> Opening Balance Equity

Debit  Account -> Accounts Receivable

Related Content to Beginning and Ending Balances

Entering Existing Beginning and Ending Financial Balances

Adjusting Journal Entries

Customer:Job Form – Overview

Entering Existing Beginning and Ending Financial Balances

How to Enter Beginning and Ending Financial Balances

When setting up Total Office Manager it may be necessary to enter existing balances for customers and vendors, along with Balance Sheet related accounts and other COA accounts.

As an overview to the process, each customer and vendor — including their respective existing balances — are entered first.  The appropriate A/R and A/P accounts thusly increase along with the built-in “Uncategorized Income” and “Uncategorized Expense” offset accounts.  Then balance sheet related accounts (like bank accounts) and their respective existing balances are entered.  The built-in “Opening Balance Equity” offset account is automatically used behind-the-scenes when entering these balance sheet related accounts.  Based on the advice of your accounting professional, the resulting balances in the “Uncategorized Income”, “Uncategorized Expense”, and “Opening Balance Equity” accounts are then typically dispersed across appropriate COA accounts (like Income, Expense, and COGS accounts) using journal entries.

Recommended Reports and Documentation

Prior to entering existing balances, it is advised to have available the most recent reports as follows:

  • A/R Aging Report

  • A/P Aging Report

  • Balance Sheet

  • Income Statement

Entering Customer Balances

Setup each existing customer using the Customer:Job form.  On each customer’s Payment Info tab, accept the default A/R account, or use a different one based on advice from your accounting professional.  Then enter the opening balance info for the customer (see the related topic, “Customer:Job Form – Payment Info Tab” for more info).  When the new customer’s information is saved, the program automatically creates an “Opening Balance” invoice for the customer, which increases the A/R account and to which future payments may be received against.  Simultaneously, the built-in COA offset account “Uncategorized Income” increases by the same amount as the opening balance invoice.

Entering Vendor Balances

Setup each existing vendor using the New Vendor form.  On each vendor’s Additional Info tab, accept the default A/P account, or use a different one based on advice from your accounting professional.  Then enter the opening balance info for the vendor (see the related topic, “Vendor Form – Additional Info Tab” for more info).  When the new vendor’s information is saved, the program automatically creates an “Uncategorized Expense” bill for the customer, which increases the A/P account and to which future payments may be applied.  Simultaneously, the built-in COA offset account “Uncategorized Expense” increases by the same amount as the opening balance bill.

Entering Balance Sheet Related COA Accounts

Balance sheet related COA accounts (like bank accounts) are those which have opening balance information fields.  Simply setup these accounts in normal fashion, entering the opening balance info for each account (see the related topic, “Chart of Accounts List” for more info on creating new accounts).  As each of these accounts is saved, the built-in “Opening Balance Equity” offset account is automatically increased to maintain proper balance of the books.

Dispersing Uncategorized Balances

As the preceding activities occur, amounts have been automatically accumulating in the built-in accounts “Uncategorized Income,” “Uncategorized Expense,” and “Opening Balance Equity” to maintain proper balance of the books.  Based on the advice of your accounting professional, these uncategorized balances are typically dispersed across appropriate COA accounts (like Income, Expense, and COGS accounts) using journal entries (see the related topic, “Journal Entry” for more info).

Topics Related to Beginning and Ending Balances

Entering Customer and Vendor Beginning Balances

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