Opening balances: how to move your books to new accounting software
The closing figures of your old books are the opening figures of the new ones. What to bring across, the one test that tells you it is complete, and why 1 April is the easiest day to switch.
Changing software does not mean starting again. Your business has a position on the last day of the old books — what it has, what it owes, what it is owed. That same position, entered on the first day of the new books, is the opening balance. Nothing more is carried, and nothing less will do.
What has to come across
- Every ledger's closing balance — bank, cash, loans, capital, deposits, taxes.
- Customers and suppliers, with their UNPAID BILLS one by one — not just a total — so that a receipt in May can be set against the right March bill.
- Stock, item by item: quantity and value.
- Goods lying with mills and job workers on the last day, challan by challan. They are your stock, and their challans are still open.
- Fixed assets, with the depreciation already charged on each.
- GST input credit balance, and any GST or TDS still to be paid.
The one test
The old books balanced on their last day. So what you bring across must balance too: total debit openings equal total credit openings, with the stock counted in. If they do not, something has not come across yet.
| Brought across | Debit | Credit |
|---|---|---|
| Bank and cash | 6,40,000 | |
| Customers' unpaid bills | 7,20,000 | |
| Stock | 20,00,000 | |
| Fixed assets | 8,00,000 | |
| Suppliers' unpaid bills | 4,90,000 | |
| Bank loan | 10,00,000 | |
| Capital | 26,70,000 | |
| Total | 41,60,000 | 41,60,000 |
Where the difference usually hides
- Capital was not entered at all. This is the commonest one — everything else was typed and the owner's account was forgotten.
- Stock was entered in quantity but with no value.
- A party's bills do not add up to its ledger balance in the old books — usually an on-account payment that was never set against a bill.
- The profit of the old year was not transferred to capital before the figures were taken.
- Balances were taken on different dates — the bank as on 31 March, the parties as on 5 April.
Do not post a journal to make the difference disappear. Every rupee of it is a real account that is missing. Find it now, while the old books are still open on the next screen.
Why 1 April is the easy day
At the end of a financial year the income and expense accounts have been closed into profit, so only the balance-sheet accounts remain to be carried. Switch in the middle of a year and you must also bring the year's sales, purchases and expenses so far — more to carry, and more to tie.
How GintiDesk does it
Opening balances come in from Excel sheets — ledgers, parties' unpaid bills, items with their opening stock, and goods pending with mills and job workers. The Import screen then says whether the openings add up, and if not, by how much and on which side. The Trial Balance shows that same figure on one row, Opening Balance Difference, until it is nil.