David Knoble, CPA, PLLC

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Entering Quickbooks Opening AR Balances

Quick­books is a superb pro­gram for small busi­ness account­ing because of a) the num­ber of cus­tomized indus­tries it sup­ports, b) the num­ber of add-on mod­ules that expand your capa­bil­i­ties and c) the ease with which we can pro­vide ser­vice to you with your monthly, quar­terly or annual book­keep­ing ser­vices.  How­ever, set­ting up accounts receiv­able bal­ances when tran­si­tion­ing to Quick­books from another account­ing pro­gram is not well doc­u­mented.  In fact, I spent half a day research­ing how to accom­plish this in Quick­books.  Here is the answer!

For those of you look­ing for a com­pli­cated answer with many mov­ing parts — I am sorry to dis­ap­point you!  The answer for inputting open­ing accounts receiv­able bal­ances is really sim­ple.  First, cre­ate either a) your cus­tomers with open invoices or b) a sin­gle cus­tomer called ‘begin­ning bal­ances’.  The answer to this ques­tion is really deter­mined by whether you use cus­tomers and invoic­ing in Quick­books.  If you do, then input your open invoices and cus­tomers so that you can later post pay­ments.  If you instead use gen­eral ledger entries for very infre­quent receiv­ables, then use the sin­gle cus­tomer method.

Sec­ond, cre­ate an inven­tory item under the Lists -> Item List menu item.  Label this item ‘Begin­ning Bal­ances’ and set the gen­eral ledger account to post as the Open­ing Equity bal­ance sheet account.  This is the account that all invoices will post to if they use this item.

NOTE:  If you prop­erly input all your other begin­ning bal­ances when cre­ated gen­eral ledger accounts, then a gen­eral ledger entry is cre­ated to the Open­ing Equity account.  Adding the accounts receiv­able open­ing bal­ances will help this account net to zero.  Then you will know all your open­ing bal­ances, well, balance.

Third, begin enter­ing your open amounts as invoices.  Use the Invoice mod­ule.  For each invoice you enter, select the appro­pri­ate gen­eral ledger account.  Then select the inven­tory item you cre­ated in step two above.  Finally, input the amount and save!  That’s all there is!

NOTE:  Also know that credit bal­ances are input using a credit memo.  Do these at the end.  Then enter a neg­a­tive amount in the ‘amount’ col­umn for an invoice.  Quick­books should then take you to the Credit Memo sec­tion where you can enter all your credit balances.

© 2009, david.knoble
by David Kno­ble, CPA, PLLC
Serv­ing Non-Profits, Busi­nesses & Indi­vid­u­als
Rock Hill, SC

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