Opening Balance

An opening balance is the amount carried forward from the previous accounting period into the current period. It represents the starting balance of assets, liabilities, and equity at the beginning of a new financial year. 

At the end of a period, all closing balances are calculated. These closing balances are then brought forward as opening balances in the new period, usually through opening balance entries or system migration. This ensures continuity and accurate financial reporting.  

Especially, the total debit must be equal to the total credits to maintain the fundamental accounting equation and make sure the trial balance is balanced. 

Location 

First go to the navigation bar; click on it. It shows you different modules. The seventh head, i.e., charts of accounts. 

Go and click on Chart of account section, click on drop down section and you will see sub section are given below.

Here you can see different subsections are given here. It includes non-current assets, current assets, current liabilities, profit & loss, and opening balances. 

Click on opening balance section. 

When you click on the opening balance option, it shows you a new page.  

There are different columns available having information of each accounting head recorded in the system with their respective amount. All heads include liability, assets, and equity. 

The first column consists of the account name, the second consists of the debit amount, and the third is based on the credit amount. 

How to use it 

Review Account name—checks the list of accounting heads shown under the account name column. Each account head shows you the specific debit and credit account with ending balance. 

Debit and credit accounts— The fundamental rule of accounting applies here; every transaction must have an equal ending balance. Users can edit debit and credit amounts by clicking on the amount section. 

At the end, the total balance will be shown along with the total debit and credit amount.   

Once you review and check the ending balance, confirm that the ending balance is the same or equal, then click on the save button, and new information will be saved in their required accounts. 

If the ending balance is not the same, then you can’t submit the information. To submit the information, you must have an equal ending balance.