Finance manual - Entering the opening balance sheet and outstanding items
Entering the opening balance sheet and outstanding items
Introduction
When you set up your financial company, you need to enter the opening balance sheet, after you have created the master data. The opening balance sheet specifies the opening balance sheet of every general ledger account in a certain year. You can enter outstanding items for debtors and creditors simulatiously. In most cases the closing balance sheet of the previous year forms the opening balance sheet of the current year. This means that you only need to enter the opening balance sheet of the first financials year and the opening balance sheet of the following years are generated automatically.
This chapter describes the entry of the opening balance sheet and the outstanding items in Exact Finance. You only need to do this once.
Procedure
- Preparing to enter the opening balance sheet
- Before you start entering the opening balance sheet, make sure all master data has been entered and a suspense account has been created.
- Entering the cash and bank balances
- Enter the cash and bank balances in the appropriate general ledger accounts (fixed offset accounts).
- Entering the outstanding items
- Enter the outstanding items either in the sales or purchase journals or in the general journal.
- Determining the balance of the suspense account
- You need to know the balance of the suspense account before you can make the other journal entries.
- Entering the remaining balance sheet items.
- Enter the opening balances for the remaining general ledger accounts, i.e. all accounts except 'Creditors', 'Debtors' and the cash and bank accounts in the general journal. Enter the general ledger account number and the correct amount.
- Checking and correcting the journal entries
- Before you post the entries, make sure that they are all correct. Check the journal entries in [Finance: Ledger, Journal entry, Entry report]. If you find any errors, correct them now because correcting a transaction is much more difficult than correcting a journal entry.
- Posting the journal entries
- After you have made sure all the entries are correct, you can post them. Posting entries means that the entries are transferred from the journals to the general ledger accounts.
- Printing the opening balance sheet
- You can now print the opening balance sheet. Check the Exact balance sheet by comparing it to the original data.
- Closing period 0.
- You should close period 0 for further entries to distinguish opening balance sheet entries from other entries. No other entries should be made in period 0.
Preparing to enter the opening balance sheet
The opening balance sheet only needs to be entered for the first financial year. For all subsequent financial years, the opening balance sheet is based on the closing balance sheet of the previous year.
Enter the opening balance in sub-menu function of [Finance: Ledger, Journal entry, Entry procedure, *] depending on the journal that you want to enter the opening balance sheet. After you have made the entries, they should be checked and posted.
- It is advisable to practice making journal entries in the demo company.
- Journal entries for the opening balance sheet should be made in period 0.
Make sure all master data has been entered. Create a suspense account in [Finance: Ledger, Master data, Maintenance, General ledger accounts]. After the opening balance sheet has been entered completely, the suspense account should have a zero balance.
Entering the cash and bank balances
The cash and bank balances should be entered in the appropriate general ledger accounts. These are fixed offset accounts. Each of them is linked to a separate journal. Their opening balances can be entered in the general journal 'Description'.
- This method does not allow you to use the statement number as the entry number. You should therefore enter the last statement number in the field 'Description'.
See also:
[Finance: Ledger, Journal entry, Entry procedure, General journal]
Troubleshooting
- Although the opening balances for cash and bank accounts were entered in the general journal, they are not displayed in the appropriate journals. Why not?
An entry you enter in the fixed offset account of a bank or cash journal is only entered in the general ledger. The opening balance will not be maintained automatically. You can enter the opening balance in [Finance: Ledger, Master data, Maintenance, Journals] or in the sub-menu function of [Finance: Ledger, Journal entry, Entry procedure, *] for different journals by the first time you make an entry in the cash/bank/giro journal.
Entering outstanding items
You can enter outstanding items either in the sales or purchase journals or in the general journal. This section describes how outstanding items are entered in the general journal. In this journal, it is not possible to use specific payment conditions. Instead, the default payment condition codes selected in [Finance: File, Company settings, Financial preferences], on the 'Subadmin' tab will be used.
Keeping revenue statistics
Amounts entered in the general journal (for period 1 and the subsequent periods) or the cash journal will only be added to the revenue per debtor or creditor if you marked the check box 'Enter revenue in cash journal' and/or 'Enter revenue in general journal' in [Finance: File, Company settings, Financial preferences] on the 'Process' tab. Disable the appropriate setting if you do not want this to be the case for entries in the previous financial year. If revenue for the current financial year should be kept for period 1 and the subsequent periods, mark the check box. Do this after you have finished entering the opening balance sheet.
If you want to use other payment conditions than the default, enter the outstanding items in the sales and purchase journals. In that case, the amounts involved will be added to the revenue per debtor or creditor.
The process of entering outstanding items for creditors and debtors is essentially the same. Take the following into account:
- Enter the suspense account on the first entry line and debit it for the total amount of the outstanding amounts you want to enter.
- On the subsequent entry lines, credit the control account 'Creditors' for each outstanding item.
See also:
[Finance: Ledger, Journal entry, Entry procedure, General journal]
Troubleshooting
- I cannot enter a debtor or creditor code for an outstanding item in the general journal. Why not?
- You should have created at least one sales and one purchase journal. If you did not, the cursor will skip the appropriate field.
- You should have entered the default offset account of the sales or purchase journal in the field 'Account'.
Printing the opening balance sheet
Exact Finance offers a wide variety of balance sheet overviews in [Finance: Ledger, Financial statements].
Closing period 0
To distinguish opening balance sheet entries from other entries, no other entries should be made in period 0. You should therefore close period 0 for further entries in [Finance: File, Financial control, Close/open periods]
Finance Manual >
Contents >
Entering the opening balance sheet and outstanding items
| Main Category: |
Support Product Know How |
Document Type: |
Support - On-line help |
| Category: |
On-line help files |
Security level: |
All - 0 |
| Sub category: |
General |
Document ID: |
18.398.767 |
| Assortment: |
Exact Financials
|
Date: |
31-12-2008 |
| Release: |
|
Attachment: |
|
| Disclaimer |