Entering Starting Balances - BC Bookkeeping Tutorials|dwmbeancounter.com

Starting balances are used only when migrating accounting for an entity to Manager from a prior accounting system. They can be set only for balance sheet accounts or, when appropriate, for their subsidiary ledgers. (See information below.) They are not used for new businesses just beginning operation. Starting balances on the date you begin using Manager should equal ending balances for equivalent accounts in the old accounting system.

As used in Guides, start date refers to the date you begin recording your day-to-day transactions in Manager. As described below, certain transactions from before the start date may still be entered; but, those should all be transactions that were also entered in your prior accounting system.

Starting balances are only set for accounts on the balance sheet, not the profit and loss statement, because balances of accounts on the profit and loss statement depend only on transactions during the current financial period. In other words, starting balances are only entered for asset, liability, and equity accounts.

Starting balances for asset accounts are normally debits, unless the account is a contra asset account (one where the balance is usually negative). Starting balances for liability accounts are usually credits, unless the account is a contra liability account. Starting balances for equity accounts are credits when the business owes money and debits when the business is owed money.

Manager has also provided a method for entering Starting Balances in the Settings Section.

Subsidiary ledgers can be thought of as subaccounts of control accounts. Control accounts may be activated automatically when certain functional tabs are enabled. They may also be custom control accounts you define on the Control Accounts page in the Settings tab. They include:

Sales and purchase invoices not fully paid (accounts receivable and accounts payable) as of your start date are entered exactly like normal invoices, but with dates before your start date. If an invoice has been partially paid, only its remaining balance due is entered. Manager uses these pre-start invoices to establish starting balances for Accounts receivable and Accounts payable. Because you will initially set your reporting period to begin on your start date, pre-start invoices will not affect your income or expense accounts. During later reporting periods, they will also be similarly ignored.

Do not use Journal Entries to enter Accounts Receivable or Accounts Payable Balances. Use the methods below.