Any business that has recently switched to Zoho Books from another accounting software or from manually maintained books of accounts, will have to ensure that all details from the previous accounts are brought in. This includes all their previous inventory levels, sales and purchase details, customers and vendors, income and expense statements, miscellaneous journal entries and a lot more.
To ensure that all the data from your previous accounting software is available once you’ve switched to Zoho Books, you will have to enter all your opening balances.
- If you're switching to Zoho Books at the end of your financial year, all the closing balances of the previous year will be entered as your opening balances for the current year in Zoho Books.
- If you're switching to Zoho Books at during any time of the financial year, you can generate a Trial Balance to identify all the debit and credit balances of your accounts.
In this page:
- Points to Note
- Enter Opening Balances
- Create New Accounts
Points to Note Before Entering Your Balances:
- Add all your bank accounts and credit cards. Adding them lists your accounts here to enter their respective balances.
- Add all your items along with their stock details. You can easily import all your items into Zoho Books and track them.
- Generate a trial balance on the date of migration so that you do not miss out any transactions or data entered later.
Entering Opening Balances
Zoho Books by default has a list of accounts that are common to all businesses. The accounts are grouped into Accounts Payables and Receivables, Assets, Expenses, Liabilities, Bank Accounts, Equity and Income. Each account category has multiple accounts under them.
To enter your opening balances:
- Go to Settings > Opening Balances.
- Enter the Opening Balance Date. This date is usually the date you’ve started using Zoho Books (this applies to both new and existing businesses).
- Enter balances of all your Receivables or Payables and Other Accounts to continue.
Entering Accounts Receivable and Accounts Payable Balances:
Opening Balance of Accounts Receivables is the closing balance of amount receivable or the amount your customers owe you in the previous year. Whereas, the Opening balance of Accounts Payable is the closing balance of the amount payable or the amount you owe your vendor in the previous account year. To enter the opening balance of accounts receivables and accounts payables:
- Go to Settings > Opening Balances > Accounts Payable/ Accounts Receivables.
- Choose the currency by clicking the dropdown near the base currency.
- Enter the amount in the Accounts Receivables/Accounts Payables section.
- Use the Minus sign (-) to enter the credit balances.
- Refer the Available Balances to get an idea about the balances residing in your account before the opening balance date and calculate your balances.
In case of foreign currency:
- Click + Enter balance in a foreign currency in case of balances in currencies other than your base currency.
- Enter the Exchange Rate for the foreign currency you’ve entered.
You could be carrying over your customer balances when you are migrating from another accounting application. Here’s how you can add opening balances for your customers to change the Accounts Receivable opening balance:
- Create an invoice for the customer and select the items for which they owe you money.
- Select the Invoice Date as the previous invoice date.
- Save the invoice.
The invoice created would be in the Overdue status. Now, the amount on the invoice is pending for them and acts as the opening balance for the customer. Similarly, you can create opening balances for your vendors.
- While creating invoices for Accounts Receivables opening balances, select the invoice date before the Opening Balance Date that you've entered while setting up your organisation.
- Do not change the Quantity of items in the invoice for entering the opening balance of your customers, otherwise it will affect your inventory. You can change the Amount to the opening balance amount in the invoice.
Entering Opening Balances for Other Accounts
Other accounts include your assets and liabilities, income and expenses, bank balances, and equity. To enter them:
- Go to Settings > Opening Balances.
- Go to the respective category under Opening Balances.
- Enter the Debit and Credit balances for different accounts.
- Refer the Available Balance to get an idea about the existing balances in your account. This is calculated based on the transactions or journals you have created or imported before the Opening Balance Date.
Click + New Account to create a new account. Enter all the details and click Save.
Enter all your balances and click Continue. The difference in the debits and credits will be included in the Opening Balance Adjustment account.
- Verify all the balances in the next screen and click Confirm.
Once you have updated all your balances, you will still be able to create transactions before the opening balance date using the Sync option.
Scenario: Let’s say your opening balance date is Feb 6 2019 and you missed recording a bill earlier on Dec 1 2018. You can immediately record the transaction in the bills page. The Sync option in the opening balances page sync all your data created before your opening balance date and adjust your balances accordingly.
You will also be able to make changes to your pre-dated transactions or delete them and sync your balances.
Insight: Based on the transactions or journals you’ve already created or imported from your previous system, Zoho Books calculates your Available Balance. It includes all the transactions that were entered before the Opening Balance Date you’ve stated here.
Creating New Accounts
In case your business deals with accounts other than the default accounts, you can create new accounts. To create a new account:
- Click the + Add New Account option in the opening balances page.
- Select the Account Type from the options available in the dropdown.
- Enter an Account Name and Account Code.
Insight: An account code is a unique combination of numbers and assigned to an account that can help to identify them..
- Mark the box near Add to the watch list on my dashboard to display the account and its balances as a widget in your dashboard.
- Enter a Description if necessary and click Save.