Opening Balance Account

[Former Member]

I'm using SBO 8.82 for an implementation project.

I want to know the Opening Balance Account which needs to be created in COA. Should an Opening Balance GL created for each drawer (Asset, Liability etc) independently or else we create only one in one particular drawer for the whole COA.

Which option is better?

Also, where should this OB GL be created exactly. I think it wouldn't be considered for future accounts once it is posted. How do we manage then?

Thanks in anticipation.

[Former Member]

Hi,

One account is prefered option becaseuse it is only a temporary account. It must be zeroed out once all entries have been created correctly. However, if you have too many accounts in each drawer, create more accounts may be easier for checking problems.

Thanks,

Gordon

[Former Member]

Hello Kiran, this is a tricky accounting procedure. I have done the following procedure that has worked for me the last 4 time I have done it with a few different software packages including SAP Business one. I understood you question as if you are moving or starting a new database for a company from an old one. If I misunderstood my apologies.

Here are the steps.

1) Insure that your trial balance balances and that your subsidiary ledgers tie to the ledger accounts

2) Create an account anywhere you like (the balance is going to be zero so it doesn't matter)

3) Configure the system that it will credit and debit the account you just created when you enter your subsidiary ledgers

4) Enter your subsidiary ledgers (A/P, A/R) etc.

    since the software is debiting and credit the same account the balance will be zero, for example  if you entered an invoice for 5 dollars the computer normally would debit 5 dollars to A/R and 5 Dollars to sales. Since we are using the same account for all functions the balance on this account will be 0 

5) Verify that your subsidiary ledgers match. That is to say your new a/r, a/p etc math the originals from the old company by running an aging report etc. Very easy to make mistakes here and since you are debiting and crediting the same account there is no way to check by looking at the general ledger. However, one you check and everything matches then you are good to go., Make any corrections as needed.

6) Enter your trial balance as a journal entry

7) Check to make sure your new trial balance matches your old one

😎 Done!

I hope this helps! Thank you

[Former Member]

PS: Please make sure you post to the correct periods because any dating mistakes here cannot be easily corrected. Also if the system can't be configured to debit and credit the same account then just let the system post where ever it want's. Then print a trial balance (prior to entering the trial balance from the old software or company) and make the opposite entries shown. This will make all accounts zero. Again being careful of the dates! Then enter your actual trial balance from the old company or database and you are done after checking everything is okay.