Entering Opening Balances

Once you are satisfied that your chart of accounts is correct, your next step is to enter your opening balances. There are several approaches you can take:

1. Obtain the information from your last set of financial statements for the prior year end. Enter these balances into period 1. Then calculate and enter the balances for each period up to the current period.

This approach is time consuming but will allow you to print useful financial reports for all periods of the current year.

2. Enter your latest information into the applicable period. For example, if you are working with a standard Australian financial year and you have a trial balance or balance sheet up to and including January, you could enter these balances into period 7.

The advantage of this approach is that it is the fastest way to update the general ledger. However, you will be unable to print reports for periods before period 7. Strictly speaking, you will still be able to print reports, but this will be pointless as all the accounts prior to period 7 will have zero balances.

The only important point to note is that the quick report writer (if you will be using it) assumes that the opening balance of your stock for year-to-date reporting can be found by referring to the opening balances for period 1. This only applies if you are using the opening stock/purchases/closing stock calculation method for cost of sales. You must either manually modify the quick report writer reports to refer to the period containing the opening balance, post your opening stock to period 1, or follow the third procedure, outlined next. A danger with modifying the standard report is that when next year comes around you may forget to change the report to refer back to period 1, and your financial statements will be incorrect. See Advice on Stock Control for more information on this topic.

3. Enter your opening balances as per your last set of financial statements for the year end. Then enter your "activity" up to and including your last set of period balances.

In order to update your opening balances you will need to enter a batch of journal entries. The procedure for entering opening balances is exactly the same as the procedure for entering regular journals.

Go to the main menu and select from the journals menu the general journal batches. The following screen will appear:

if journals have already been entered this screen will also list them.

to add a new batch click add. The next available batch number will be issued to the batch.

Press tab to skip past the batch no field. The cursor will appear on the period no. field. Enter the period number that the batch will relate to. All journals entered in a batch will effect the period specified here. If you need to effect multiple periods, you will have to enter multiple batches with different period numbers. To enter transactions in period 1, type 1 then tab. To list the periods you may click

Once you have specified the period you want to enter journals for, continue to press tab until you move to the description field. Enter a meaningful reference such as "opening balances as of xxx" or some other remark to that effect. Keep pressing tab until you reach Ok or just click on Ok, the journal entries screen will appear.

From this screen the individual journals that make up the batch of entries are typed in.

Enter the account code or click to list the chart of accounts. If you list the chart you can use the scroll bar to see more accounts. Click the account to select and transfer the highlighted account code into the journal or click the x to return to where you left off.

Enter the date of the journal. While you may enter dates outside the period that the batch is created for, postings will still effect the period of the batch, not the period of the individual journal. CAPITAL GL Controller will beep and an arrow will flash next to the date if the date you specify is outside the range of the batch period. Entering dates outside the batch period date will make reconciliation's more difficult.

For opening balances, the date would normally be specified as the last day of the applicable period, but this optional

Once the applicable account code is entered, type in the debit amount or if the transaction is a credit, press tab to move to the credit field and enter the credit amount. Amounts in CAPITAL GL Controller are always entered as positive debit or credit values. Negative numbers are not allowed.

For opening balances you may wish to skip the reference, details and narration fields. The reference serves as a short identifying remark that describes the purpose of the journal. The details field a secondary remark that serves a similar purpose. You can enter extensive comments by typing explanations into the narrations field. There is no practical limit to the amount of comment information you can attach to each journal. If the description you type does not fit into the space on screen, the space expands and lets you continue typing. Pressing tab will save the narration. If an error occurs you can click clear and re-enter otherwise click save.

Once the first journal is entered you will notice that the balance field will show the total at the top of the screen. Credits are displayed as negative balances, debits as positive. Since there must be a debit offsetting every credit in a balanced batch, your objective is to ensure that the balance is zero by the time you have finished. If the balance is not zero there is a mistake in your journal entries. You will still be able to save your work, but you will not be able to post to the general ledger until the error is found and corrected.

The cursor bar will highlight the last worked on transaction. If you need to go back and edit a previous journal, double click on the journal you need to edit, or you can use the scroll bar to view more journals if they do not all fit on the one screen. The cursor will now highlight the transaction at the point the scroll bar was stopped. You can either edit it and then click save or click delete depending on your requirement.

When you are finished with the batch you can click total to total the journals. This will save the new entries in the existing batch. If you click leave, any work you have just entered will not be saved. If the batch does not balance the following message will appear:

Attention

Journal entries do not balance

Total this batch anyway?

If you wanted to save your work for now and go back and correct the problem later, you would click yes. Otherwise you will be returned to the journal entries screen.

You can go back and add, edit and delete journal entries as many times as you wish. All you have done is enter a batch. Before the balances in the general ledger can be effected, you will need to post the batch. See "Posting".