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Opening balance

Accounting  — Fri 24 Jun 2022

An opening balance sheet is a snapshot of the balance sheet. Every company takes the balance sheet year by year, from incorporation to dissolution. At the end of the fiscal year, the state of this balance sheet is kept, which is the closing balance sheet. In the next fiscal year, this also forms the beginning balance sheet again, they are the same.

  • Balance sheet: the overall state of an accounting system. It is always current and covers all of a company's fiscal years.
  • Closing balance sheet: a copy of the balance sheet at one specific time. You create this at least once each fiscal year, usually on December 31.
  • Opening balance sheet: equal to the previous closing balance sheet. This is used as the starting point for a new fiscal year, usually on January 1, or when switching accounting packages.
My business has just started, do I need an opening balance sheet?

If your business has just started, you don't have an opening or closing balance sheet yet; you're still working within your first fiscal year. Only at the end of that financial year do you draw up your first closing balance sheet.

If you are going to use Daxto within your first fiscal year, and previously kept the accounts in another way, then you can draw up a closing balance. This summarizes your previous bookkeeping up to that moment. You then use this as the opening balance in Daxto, so you continue where you left off. The alternative is to copy the bookkeeping before Daxto into Daxto. Then you do not have to create a closing balance based on your previous bookkeeping.

My business has been going on for a while, do I need an opening balance sheet?

Businesses that previously kept accounts can use them as a starting point in Daxto. This allows you to easily pick up where you left off. This can be done at any time, not only at the end of a financial year. You don't have to re-enter your entire bookkeeping in Daxto. With a closing balance you summarize your previous bookkeeping up to that point, you enter this balance in Daxto as an opening balance. Then you can continue to work seamlessly.

If I start with an opening balance sheet, do I have to copy it exactly into Daxto?

No. It is necessary that the totals correspond exactly. On the other hand, you can use the entry of the balance sheet as an opportunity to clean up your bookkeeping immediately. Daxto comes with a clear and convenient balance sheet format that is ready for use. Connecting to it is therefore recommended. Can't do that yourself? No problem. A bookkeeper or accountant can help.

  • Review the standard balance categories in Daxto. Then review your closing balance sheet. Is there anything missing or different?
  • Whenever possible, it is best to "translate" categories on your closing balance sheet into existing categories in Daxto.
  • If any categories are missing, create them in Daxto before entering the opening balance.
  • Now create a new opening balance in Daxto. You do this via a new memorandum booking.
  • For example, enter "Daxto opening balance sheet" as the title.
  • Enter as the book date December 31 of the fiscal year prior to the year in which you begin Daxto.
  • Set as type 'Balance' and leave 'Settle with Invoice' set to 'None'.
  • Fill in a description for yourself that makes it clear that you are translating a previous final balance to Daxto.
  • Create rules for the amount of categories you need. Then fill them in.
  • The totals of the debit and credit columns should match. Now save the memorandum booking.
  • Finally, check your Daxto balance sheet report as of January 1 of the fiscal year in which you begin.
  • The balance sheet total at the bottom of your Daxto balance sheet report should now be equal to your used closing balance.