How To: Enter Opening Balances

Overview

Entering Opening Balances in Khaos Control consists of the following steps:

1. Creating the Nominal Accounts.
2. Creating the Bank Accounts.
3. Journaling between the nominal accounts.
4. Entering customer and supplier opening balances.
5. Checking that the entries match those contained in your previous accounting system.

Nominal Accounts that must be Created

Nominal accounts need to be created for example:

1. Bank Accounts e.g. Sterling account, deposit account, credit card account.
2. Customer and Supplier Opening Balances; these should have a System Type of Customer Opening Balance and Supplier Opening Balance respectively.
3. If an Opening Balances nominal is required for the following transactions, please consult with your accountant with regards to which 'System Type' to use. For more information on System Types see System and Account Type Nominals:
   1. Wages and salaries.
   2. Property and equipment.
   3. Motor vehicles, motor insurance.

See How To: Create Nominal Accounts if you have not set up your nominal accounts.

Create your Bank Accounts

You will need to set up your bank accounts before entering your opening balances. You will need at least one bank account for each different currency that you use. See How To: Create a New Bank Account to set up your bank accounts.

Enter the Opening Balances in the Nominal Accounts

1. Open the [ Accounts | Nominal Accounts | Nominal Accounts ] tab.
2. Double-click or drag-and-drop on the nominals that you wish to transfer money between into the lower grid or use Quick Journal Entry.
3. Enter the credit and debit values in the grid.
4. Enter a note into the Note field above the grid for example Opening Balances.
5. Press Ctrl+S or click to save to create the journal.

Notes:

• Credit takes money FROM an account, debit moves money INTO an account.
• It is possible to have multiple credits and a single debit or vice-versa.

Example One

Journal £100 from your Opening Balance Nominal into your Sterling Bank Nominal (Entering the money into your Khaos Control Sterling Bank Account, for example when creating your opening balances):

Example Two

Paying the wages - money is moved from the Sterling Bank Account and into the different wages nominals.

Entering Stock Opening Balances

The nominals required to enter the stock opening balances already exist in the system.

When you adjust your opening stock into Khaos Control the above journalling will take place when the stock adjustment is posted.

It is important to check the opening Stock nominal account balance after adjusting initial stock levels and before posting any transactions that impact the Stock nominal (e.g. issuing an invoice), as this will result in unmatched Stock and Stock Adjusted balances.

If the balances are not correct it will need to be corrected manually, see Amending your Opening Stock Balance.

Enter Customer and Supplier Opening Balances

1. Open the [ Accounts | Nominal Accounts | Trial Balance ] tab.
2. Right-click in the left-hand grid and select "Enter Opening Balance" from the context menu to display the Opening Balances Dialog.
3. Use the button to open the Company lookup.
4. Find the customer or supplier the opening balance is for.
5. Enter the invoice number.
   Note: when entering Invoice numbers, we strongly recommend prefixing them with "OB" (e.g. OB000123). Adding the OB prefix removes any confusion as to whether the Invoice Number has been generated by Khaos Control, imported from an earlier system or entered using the "Opening Balances" dialog and helps prevent opening balances from being accidentally deleted.
6. Enter the gross value (i.e. including VAT) of the opening balance into the 'Amount' field.
7. Enter the date you want this journal to be posted.
8. Select which ledger the opening balance is to be posted to:
   • For customers: select "Customer Opening Balance" from the 'Nominal' drop-down menu.
   • For suppliers: select "Supplier Opening Balance" from the 'Nominal' drop-down menu.
     Note: Customer and Supplier Opening Balance Nominals MUST be created by the user and are with the relevant nominal System Type.
9. If the opening balance is a credit (i.e. you owe the customer OR the supplier owes you), tick the 'Credit Note' checkbox.
10. Select the correct tax rate to use.
11. Tick the 'Post Tax' checkbox, if applicable.
    • UNTICKED means that the all the invoices that make up the new opening balance have been included in a previous tax return.
    • TICKED mean that all the invoices that make up the new opening balance have NOT been included in a previous tax return and will be included on you next one.
12. Select the currency you are entering the opening balance in.
    Note: The customer (or supplier) must have been set to use the same currency. It is not possible to change the currency once a customer/supplier has linked transactions.
13. Add a note (Optional).
14. Pressing the 'OK' button will add a single opening balance; alternatively pressing the button allows you to continue to add transactions until 'OK' is pressed, when the system will save the opening balances.

Checking!

Once you have entered the opening balances into the nominal accounts these will be displayed in the [ Accounts | Nominal Accounts | Trial Balance ] tab. The opening balances in the [ Accounts | Nominal Accounts | Trial Balance ] tab should mirror the nominals in your previous accounting system and therefore the totals of your accounts should also match. An example of opening balances:

Amending your Opening Stock Balance

To correct the stock opening balance is a two step process:

1. To reverse the original journalling and make the balances in the Stock and Stock Adjusted nominals zero.
2. Enter the correct stock value.

Note: If Stock and Stock Adjusted nominal balances do not match, the below method of correcting the initial calculated balances should not be used.

Zero the Stock and Stock Adjusted Nominals

1. Open the [ Accounts | Nominal Accounts | Nominal Accounts ] tab.
2. Double-click or drag-and-drop the Stock and Stock Adjusted nominals into the lower grid.
3. Enter the value currently in the stock and stock adjusted nominals, see example below:
   1. Credit the stock nominal.
   2. Debit the Stock Adjusted nominal.
4. Enter a note into the Note field above the grid for example Reverse incorrect opening stock balance.
5. Press Ctrl+S or click to save to create the journal.

An incorrect value of 123400.00 has been entered so the following journalling must take place to zero the Stock and Stock Adjusted nominals.

Enter the correct stock value

1. Open the [ Accounts | Nominal Accounts | Nominal Accounts ] tab.
2. Double-click or drag-and-drop the Stock and Stock Adjusted nominals into the lower grid.
3. Enter the value currently in the stock and stock adjusted nominals, see example below:
   1. Debit the stock nominal.
   2. Credit the Stock Adjusted nominal.
4. Enter a note into the Note field above the grid for example Corrected opening stock balance.
5. Press Ctrl+S or click to save to create the journal.

See Also

• Accounts overview