SAP Business One 8.82 Opening Balances

[Former Member]

Dear all,

I am working on setting up our first SAP B1 client and I have challenges setting up the opening balances. I have reviewed many materials on the partner portal and also searched the forum for answers with no luck.

Based on the resources reviewed and studies carried out, I have identified that we need to set up the following opening balances

1. GL Balances: - We have gotten the last trial balance from the customer and we would be picking the GL balances for balance sheet items from the trial balance. We also have set up the opening balances account and specified this in GL Determination. If the figures are okay, the opening balances account should be 0 once we specify all balances.

2. Business Partner Balances: - I noticed that the opening account specified in the GL account determination is automatically selected. But posting the BP balances leaves a balance in the opening balances account. How do I resolve the figures in this account since the account should be 0.

3. Inventory Balances: - The Inventory Opening balance screen requires an inventory open account which does not exist under GL determination and the opening balances account created is not automatically selected. I selected the account and also experienced the same scenario with the BP opening balances.

My questions are;

1. Which accounts should be specified as the opening balances account for BP and Inventory?

2. How do I ensure that the balances are 0 after posting BP and Inventory balances?

3. How do I reconcile the figures created in the opening balances account after posting BP or inventory balances?

There is no how to guide on opening balances and I would appreciate any guide or answers that can be recommended.

Regards

Debola

[former_member186095 · Accepted solution]

Hi Adebola,

What is your database localization ?

If it is UK, based on best practice, you must create the opening balance accounts under capital and reserves. There is no equity drawer in such database although everyone can say that equity drawer is as same as capital and reserve but I think that's wrong.

These following links will explain more detail about the opening balance account:

http://scn.sap.com/thread/949614

http://scn.sap.com/thread/3174912

http://scn.sap.com/thread/2045142

Rgds,

Jimm

[Former Member · Accepted solution]

Hi Jimmy,

My database localization is UK. You are right. I created the opening balance offset account under Capital and Reserves.

I have looked at the links provided and it is all beginning to make sense. I do not have an accounting background but after years of reviewing financials, I do know that a balance sheet has 3 account entries.

1. Inventory / Stock (Assets). This account reflects net of stock balances

2. Trade Debtors (Assets). This account reflects the net of customer balances

3. Trade Creditors (Liabilities). This account reflects the net of vendor balances

If I have one opening balances offset account (I don't understand why I need to create 3 offset accounts like it was stated in one of the treads) and I post balance sheet GL balances excluding the balances for the 3 accounts listed above. The net amount in the account will not be zero. I can then go to BP balances to post customer and vendor balances (the net should be a combination of the trade debtors and trade creditors balances) and the inventory opening balances (the net should be the inventory figure on the balance sheet). Posting the opening balances for BP and Inventory should turn the balance in the opening balances account to 0.

If this is true, the question now is will SAP B1 automatically recognize the customer balances and vendor balances as trade debtors and trade creditors respectively?

I am grateful for all the assistance offered so far.

Regards

Debola

[former_member186095 · Accepted solution]

Hi Adebola,

You can create one opening balance account as an offset account for the inventory, trade debtor and trade creditor.

SAP B1 will use trade debtor account as customer balance if you set it as control account in the chart of account and will use trade creditor as vendor balance if you set it as control account in the chart of account. The other name for both are subledger accounts.

Rgds,

Jimm

[KennedyT21 · Accepted solution]

HI Adebola ,

Offset account for this going to be opening balance offset account under Capital and Reserves

These are the control accounts.

1. Inventory / Stock (Assets). This account reflects net of stock balances

2. Trade Debtors (Assets). This account reflects the net of customer balances

3. Trade Creditors (Liabilities). This account reflects the net of vendor balances

Control account: An account designed for the purpose of controlling the transactions that are posted to it. Only transactions from subsidiary modules such as A/P, A/R, and inventory can be posted to a control account; manual journal entries cannot be posted to a control account. This prevents malicious or suspect entries from being made to material accounts, such as receivables, cash, or inventory, and provides a better audit trail.

is to maintain multiple Account in a Single Account called as Control Account.

To maintain the Entire Transaction as well as the peer level transaction .

SAP allow to defines account as a control account. The control accounts are linked to business partners and reflect their activities in the financial reports. Only accounts defined in the Assets and Liabilities drawers can be defined as control accounts. Control accounts appear in the chart of accounts in green.

Regards

Kennedy

[Former Member · Accepted solution]

Hi All,

In connection to Adebola's problem, My GL Opening balance GL account is already zero but when I generate Profit and Loss report, the GL Opening balance account would reflect certain amount. I was trying to figure out the cause since the original document date of the invoices was entered in posting date in SAP. Note that the cut-off period for uploading the beginning balances is May 31 and the invoices dated prior to may 31 was posted in its posting date not the document date.

Thank you.

Regards,

Alven

[Former Member]

Hi Debola.........

You are absolutely right.

Its Opening Balance Offset Account should be zero....

And it would be zero only when you have accurate opening balances for GL/BP and Stock.

For Example:

1. for OB of BP:

BP: 100 USD Dr.

OB GL: 100 USD Cr.

2. For GL:

GL: 200 USD Cr.

OB GL: 200 USD Dr.

3. For Stock

Stock GL: 100 USD Dr

OB GL: 100 Cr.

Now if you sum up all the OB GLs  you can find its summation as zero..

Because it includes all the balance of balanced transactions.......

Regards,

Rahul

[Former Member]

Hi Rahul,

Thank you for your response. I do understand step 1 and 3. Which GL account will I credit in set 2 to make OB GL zero?

Regards

Debola

[Former Member]

Hi Debola...........

It would be the same GL account which is consistent in step 1 and 3 just to make it so simple and easy...

Regards,

Rahul

[Former Member]

Hi Rahul,

Steps 1 and 3 have the OB GL acting as the second leg for the transactions. For step 2, you have the OB GL and the GL account. I understand the OB GL but I need to know what the other GL is.

Regards

Debola

[Former Member]

There are three types of Opening balances you need to punch.....

1. BP Balances

2. Stock Balances

3. General Ledger (GL) Balances

Agree?

General Ledger is nothing but GL where your Assets, Liability, Equity, Revenue, Expenditure comes.......

Regards,

Rahul

[KennedyT21]

Hi Adebola Adenusi ,

Create Under Liability Drawer Profit &Loss control account as  Opening Balance Account.

Actually this is you Profit & Loss account means after entering all the Opening balance it will bring you the Profit and Loss as per your  Financial Statement... If you not enter you profit& Loss .. It is Offset account which should be zero if your Financial report tallied..

Regards

Kennedy

[Former Member]

Hi Kennedy,

Thanks for your response. Based on an example COA I saw, the opening balances account was created under Capital and Reserve / Profit and Loss.

Also, I don't have an accounting background but I do know that if you enter all Balance Sheet GL balances and the profit / loss for the account, the account should balance (this is a reflection of the trial balance).

I am okay with the GL opening balances. I am interested in resolving BP and Inventory opening balances.

Regards

Debola

[KennedyT21]

Hi Adebola ,

The Same offset account used for the GL opening balances will resolve in the BP & Inventory Posting.

Regards

Kennedy

[Former Member]

Hi Kennedy,

If I use the same GL opening balances account for BP and Inventory, there would be outstanding figure in the offset account. I do need to net these figures against another account since they wont nill off like you will have for the GL opening balances.

Regards

Debola

[KennedyT21]

No How For the GL Debtors & Creditors you going to use BP Same for Opening Balance of Stock going to Use Inventory...

There wont be any Balance in the Offset account...

Regards

Kennedy