While perusing the QuickBooks forum, I came across an answered question regarding the Opening Balance Equity account. It pretty much had a few answers which soon became a place for ProAdvisors to vent about this account to the makers and developers of QuickBooks. Why do ProAdvisors hate this account?
Well, it is because it is a place where the system puts the other half of a transaction during the set-up of a new company. QuickBooks advertises that it is an easy to use program (which it is), but what happens is, when the novice "bookkeeper or business owner" sets up his or her QuickBooks data file, you need to start with your Trial Balance from the prior year. In essence, you should have no balance in that opening balance equity account when you have successfully set up your accounting.
I just had to laugh at the responses from ProAdvisors regarding this account. They have to realize that QuickBooks has to put the monies somewhere while you are in set up. I cannot begin to tell you how many times I have had to fix this account in my years of helping clients with QuickBooks. But, oh well, it keeps me in business. Yes, you should have your CPA or a ProAdvisor help you with set-up of your records with your new accounting system. But with a little research, you can do it yourself.
Well, it is because it is a place where the system puts the other half of a transaction during the set-up of a new company. QuickBooks advertises that it is an easy to use program (which it is), but what happens is, when the novice "bookkeeper or business owner" sets up his or her QuickBooks data file, you need to start with your Trial Balance from the prior year. In essence, you should have no balance in that opening balance equity account when you have successfully set up your accounting.
I just had to laugh at the responses from ProAdvisors regarding this account. They have to realize that QuickBooks has to put the monies somewhere while you are in set up. I cannot begin to tell you how many times I have had to fix this account in my years of helping clients with QuickBooks. But, oh well, it keeps me in business. Yes, you should have your CPA or a ProAdvisor help you with set-up of your records with your new accounting system. But with a little research, you can do it yourself.
Check out my website www.artesanibookkeeping.com
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