Setting Your Initial Capital, Opening Balance and Closing Balance

Initial Capital

If you are just starting your business, you may need to record a special accounting transaction for your initial capital.  To do so, you should use "New Accounting Transaction".

Example:  

You are starting your company and investing $10,000.

  1. Make sure you have your company bank account recorded in OneUp.  You can view the list of your banks in the menu "Accounting"
  2. Next, Open the action, "New Accounting Transaction".
  3. Record the transaction as:

    • DEBIT: Bank Account  10,000
    • CREDIT: "Paid in Capital" 10,000

Opening and Closing Balance

Create an accounting transaction in Accounting - Chart of Accounts - green button - Accounting Transactions, set your opening balance date and name the transaction, so, you can identify it later.
 
Register all of your debit and credit amounts for your asset and liability accounts and also post the profit or loss into the corresponding account from your chart of accounts.
 
Example:
 
Balances from your former accounting application:
 
 
 
Bank  1000  in your favor = debit balance
Accounts Receivables  500  in your favor = debit balance
Other Assets  500  in your favor = debit balance
Inventory  1000  in your favor = debit balance
TOTAL ASSETS  3000  
     
Accounts Payables  200  your debt = credit balance
Other Liabilities  100  your debit = credit balance
Loans  200  your debt = credit balance
Capital  1000  your debt = credit balance
Profit  1500  in your favor = credit balance
 (loss would be a debit balance)
TOTAL LIABILITIES  3000  
 
 
You would then set up an accounting transaction like:
 
 

Tip:

If you need to create an opening balance as of 01/01, but want to set up balance sheet as well as P&L, it might be best to create this accounting transaction for all balances as of 12/31 (previous year) and then use the year end closing, that will allow you to start with opening balances into the new year.

You would then just set up ALL balances from your balance sheet as well as your Profit and Loss Statement. From the nature of accounting, the transaction would be balanced and the year end closing would post your profit and loss into retained earnings for the new year.

You would need to set up your accounting transaction:

  • All debit balances from your balance sheet = debit entries in the transaction
  • All credit balances from your balance sheet = credit entries in the transaction
  • All debit balances from your P&L = debit entries in the transaction
  • All credit balances from your P&L = credit entries in the transacton

 

BALANCE SHEET    
Bank  1000  in your favor = debit balance
Inventory  500  in your favor = debit balance
TOTAL ASSETS  1500  
     
Accounts Payables  100  your debt = credit balance
Capital  1000  your debt = credit balance
Profit  400  not used in the transaction
TOTAL LIABILITIES  1500  
     
PROFIT AND LOSS STATEMENT    
Sales  1000  income = credit balance
Cost of Goods Sold  400  cost = debit balance
Utilities  200  cost = debit balance
Profit  400  

 

Closing Balance 31/12/XXXX would look like:
 
 
After registration of your closing balance from the previous year, you need to run a year end closing to start with the open balance into your new year.
In the example above, you would close 2015 and start 2016 with the opening balances in your balance sheet as of 01/01/2016.
The year end closing can be run through:
Accounting - green button - Accounting Transactions - green button - Year Close Fiscal Year.
 
 
 
Notes:

If you create for example an inventory count sheet to generate an opening inventory, you will automatically create an opening balance in your accounting, so, please make sure you do not set up your inventory opening balance in any additional accounting transaction.

The same is valid for bank accounts, if you use the bank entry matching coming from a bank statement for example. For details about bank feeds, please see here: support article

If you create invoices and bills to generate your customer's or vendor's opening balance, you would also already have the according posting in the balance sheet and P&L.

 

Tip:

If you need to create an opening balance as of 01/01 and include balance sheet and P&L, it might be best to create this accounting transaction for all balances as of 12/31 and then use the year end closing to start with opening balances into the new year.

 

IMPORTANT NOTE:

The examples in this article are meant as general guidelines only, you should refer to a local CPA who is specialized in local and legal requirements in terms of accounting rules in your country.

 

 

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