Just installed ERP next for my small company. I am now updating opening balances, and have done following so far;
Journal entry, for the opening Balance of my Bank Accounts - starting back from the start date of my fiscal year 1st Aug 2016. I used temporary opening account.
Accounts Receivable using Sales Invoice as at the start of my fiscal year 1st Aug. Again I used temporary account.
However, I see that after that my balance sheet is not showing the correct balances. For example it does not consider Bank Opening Balance as an Asset in Balance sheet.
So is using the Temp opening account the right method, or should I use the Opening Trial balance, where put all Assets as at the start of accounting year, and then enter equivalent entries on the Liability side e.g. Equity, Retained Income, Payables etc.
In the Journal Entry, there is a field called “Is Opening”. Did you update this field as Yes? Are you able to see Bank Balance when checking Balance Sheet from 1-8-2016?
Yes I did select that filed of “Is Opening” as Yes. But the Assets in Balance Sheet, did not take the Bank Balance into account, as it has nullified it with temp opening account that I used in the Journal entry.
For example, if have 1000/- in bank balance, and 500/- as accounts receivable, I should see something like below;
Bank : 1000
Account receivable: 500
Total Assets: 1500/-
But since I used Temporary Opening account, Bank Balance of 1000 was made to zero by an equal Temp A/C.
However, I deleted opening transactions and used “Opening Entry” as entry type to enter all balances from my closing balance sheet of last financial year. This worked well and could see Bank Balance and all other Assets and Liabilities correctly.
I therefore think that the better way to enter opening Balances is to use “Opening Entry” instead of Temporary Opening Account.
Thanks a lot for the help!