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An opening balance (or starting balance) is the dollar value of an account when you started using MYOB. This might be at the beginning of a period (e.g. a new financial year), or when you add a new account.
You need to assign opening balances to your detail accounts so you can accurately track your business performance. The balance of the header accounts will show the total of the detail accounts which sit under them. What are header and detail accounts?
The opening balances you enter should be as at the Opening balance date specified in the Financial year setting of your Business settings. This date was set when you first started using MYOB and cannot be changed.
Where do I get my opening balances?
You can find your account opening balances on a trial balance report, a balance sheet or a profit & loss report prepared immediately prior to when you started using MYOB. You can either ask an accounting advisor (such as your accountant) to prepare these reports, or find your account opening balances using your previous accounting software or paper-based records.
If you began using MYOB:
- at the start of your financial year, enter the opening balances of your asset, liability and equity accounts only. The opening balances of your income, cost of sales and expense accounts should be zero.
- at any other time of the financial year (for example, in September, when your financial year started in July), enter the opening balances of all your accounts.
To enter an opening balance
Go to the Accounting menu and choose Chart of accounts.
Click Edit accounts.
Enter amounts in the Opening balance column.
Enter opening balances as positive numbers
Don’t, for example, enter your liability account balances as negative numbers. Enter negative amounts only if accounts truly have negative balances. As a rule, these will be asset accounts that record accumulated depreciation.
After entering all of your opening balances, check that the REMAINING BALANCE amount shows $0.00. If this displays an amount other than $0.00, check your opening balances again because they are either incomplete or incorrect.
However, you can continue the setup process if there is a REMAINING BALANCE amount. The amount will be assigned to a special equity account called Historical Balancing.
About historical balancing amounts
A frequently-used financial report is the Balance Sheet. It lists everything your business owes and owns, and the net amount equals your real share of the business (equity). This is commonly expressed as: Assets less Liabilities = Owner's Equity. If when entering your opening balances, you don't enter all the figures, or there's an error in one of the balances, then the Balance Sheet won't balance. To overcome this temporary issue, MYOB enters the balancing amount in the Historical Balancing account. When you eventually enter all the asset, liability and equity amounts (or find the incorrect values), the Historical Balancing account's balance will return to zero.
So if you're seeing an amount in the Historical Balancing account, don't panic. Just check that you've entered all the assets, liability and equity balances correctly as at your conversion date. You might find it helpful to compare the balances you've entered with a balance sheet provided by your accountant, dated as at your conversion date.
- When you're done, click Save.
Changing opening balances
Your account opening balances are directly related to the Opening balance date specified in your Business settings, so don't change your opening balances without discussing the implications with your accounting advisor.