Clearing the opening balance account

[Former Member]

Hi experts,

I would like to ask your suggestions on how you can clear the opening balance gl account and what drawer should it be placed? For example, after the inventory beginning balance has been uploaded and debited to an inventory gl account under the assets drawer, what gl account should I used to offset (credit) the balances. Should I used an inventory suspense beg. balance gl account under assets or a temp gl account like SAP opening balances under Equity drawer? and how can I clear those opening balance accounts?

Thanks in advance,

Maria

[Former Member]

Hi Maria,

You can open the OB clearing account under any drawer as at the end of importing the OB, the clearing account should be zero.

Now, in your case, after entering OB for stock, the JE would look like:

Stock --- Dr

OB Clearing account--- Cr

To clear the amount in OB clearing account, when you post the OB of GL, replace the inventory account by OB clearing account, as a result,  the value which was credited in the OB account when you posted the stock opening, will get debited with the same value once you post the GL balance and thereby making it zero.

Hope this helps.

Thanks,

Joseph

[Former Member]

Hi Maria,

If your all opening balances are uploaded correctly, the opening balance gl account should be cleared automatically.

Thanks,

Gordon

[Former Member]

Hi Gordon,

Thanks for the reply. Will you be able to give an example?

Thanks,

Maria

[Former Member]

You may post a screenshot to show your non 0 opening balance account with the posting you have done for the opening balance.

[Former Member]

Hi again,

I can't seem to attached the screenshot. but here is the JE created from my Inventory Beginning Balance upload:

JE:

     324000 SAP Go Live Inventory Suspense Acct          $107,100 (Credit)

     141000 Inventory                                                         $107,100 (Debit)

SAP Go Live Suspense account is under Equity now how can I make it zero or cleared in the system?

Thanks,

Maria

[Former Member]

Inventory is an asset account. You need an offsite account on the liability/equity side for the value.

Opening balance account is a temporary account to hold the value only.

In you case, sound like you are trying to bypass this process.

[Former Member]

Hi Gordon,

In my example above, account 324000 is an opening balance account under the Equity drawer. How will I be able to clear this account?

Thanks

Maria

[Former Member]

Hi,

For example:

Assets = 10

Liabilities = 4

Capital & Reserve = 6

Now, you upload to B1

1) Dr Assets 10

     Cr Opening balance account 10

2) Dr Opening balance account 4

     Cr Liabilities 4

3) Dr Opening balance account 6

     Cr Capital & Reserve 6

You can see, after finishing OB transfer, account balance of that account is zero

Hope this helps,

TVSon

[Former Member]

In Your case:

JE:

     324000 SAP Go Live Inventory Suspense Acct          $107,100 (Credit)

     141000 Inventory                                                         $107,100 (Debit)

While entering OB for Inventory account, replace 141000 with 324000 and this would make the balance of your offset account zero.

Thanks,

Joseph

[azeemhafeez]

Hi Maria,

Yes, you are right. You should use an "Opening Balance" GL account of clearing nature under Equity Drawer and use this account for Opening Balance Transfer. Similarly for year end closing you should have an account with name "Closing Balance" Account. Both of these accounts should show zero balance when the process is done.

Regards,

Azeem

[Former Member]

Thanks for the reply Azeem. Would just like to ask how I can make these opening balance zero after I finished uploading the inventory balances?

Thanks again,

Maria

[azeemhafeez]

Hi Maria,

There is little Accounting involved in it. When you upload all Assets, Liabilities and Capital then this account should have zero balance as

Assets = Liabilities + Capital.

Regards,

Azeem