accumulated depreciation, allowance for doubtful accounts (AFDA) and sales returns Note that there are some amounts known as “contra” accounts which are negative assets or liabilities. Liabilities, equity and revenues are credits. To create a journal entry first you have to determine the closing balances from the date of transfer and whether they are debits or credits. Rather every balance is specifically allocated to an account in a journal entry. This method is preferable as since your debits and credits have to match, there is no “opening balance equity” account. Enter opening balances via a journal entry The balance in this account should always be $0 unless there is an exceptional circumstance and using this method often results in a balance in opening balance equity.Ģ. By entering an amount directly in the chart of accounts for the specific account, QBO automatically makes an entry to “opening balance equity”. This method is not loved by accountants as it often leads to errors and it is more onerous to determine if the debits and credits match. The first way is to enter the opening balance directly into each account on the chart of accounts. There are two ways to enter opening balances in QBO:ġ.Enter opening balances directly through the chart of accounts Consequently, when opening balances are entered there should be no discrepancies between the debits and credits. This is achieved through the magic of debits and credits where every debit has a corresponding credit (there can be more than one credit or debit in a transaction as you will see below). In accounting, a balance sheet is structured so that the assets ALWAYS equal the liabilities and equity. Enter the closing balances from the financial statements of the previous year to ensure continuity of balance sheet balances. This can be a complex process and usually requires someone with accounting and QBO expertise.Ģ.
If you are using a spreadsheet or an unsupported accounting software, you will need to export the data into excel and import it into QBO using a third party automation software such as SAASAnt or Business Importer. It is worth speaking to their customer service department to see if they are able to take care of it. If you are transferring your data from a third party accounting software, sometimes QBO will be help you with transition. The detailed process for this can be found on QBO’s website. If you are simply transitioning from QB Desktop, the process is somewhat automated and can be done directly through QBO. This is valuable if you have history that you want to preserve. Bring in all detailed transactions that have occurred since the inception of the business. You have two choices for bringing in your historical data:ġ. Two choices for reflecting historical data when transitioning your accounting to QBO: The amounts on a balance sheet are essentially an accumulation of all activity since inception of your business and broadly includes assets, liabilities and equity. This is done by transferring the balances from your balance sheet at a specific date, which is ideally the year end date of your business. When transitioning from a different accounting system, whether it is spreadsheet or another accounting software, one of the first steps is to ensure that your data at the previous year end for your business is correctly reflected and establish continuity. Learn everything that every QBO user needs to know, increase your profitability, and take control of your small business finances with QuickStart Your QuickBooks
Step by step instructions on how to do everyday tasks such as invoicing, expenses, journal entries, banking and sales tax filingĪ review of the essential reports that every business owner should use to analyze their businessĪccounting terminology and best practices every small business owner should know How to migrate your data from QuickBooks desktop or using journal entries (with detailed explanations)Ī review of each of QBO’s numerous features and detailed instructions on how to customize every aspect of your setup (including Canadian sales taxes (GST/HST/QST)) Over 250 pages of tips, tricks, and actionable steps you can implement immediately.Īn examination of which Canadian version of QBO is best for your needs *Based on the 2021 version of QuickBooks Online* Best of all, no prior accounting knowledge is required - each chapter is explained in an easy to understand way along with screenshots so you never feel lost. The step-by-step guide allows you to learn at your own pace and demystifies common problems that many users of QBO experience. QuickStart Your Quickbooks, specifically written for Canadian businesses, aims to take you from a complete novice to a confident intermediate user on a timeline that works with your schedule.