Setting up Bank Accounts and Opening Balances

Posted by on Jan 13, 2011 in Getting Started in QuickBooks | 60 comments


The Opening Balances in QuickBooks relate to the Balance Sheet accounts. If you are starting somewhere in your fiscal year, say after the first quarter, then you will have to input those figures for all the accounts using a General Journal entry.

I will first deal with using the account setup and opening balance features before addressing the journal entry.

Bank Account – Now you may have set this up already in the EasyStep Interview but if you did not have all the statements, or were in a rush and skipped that step, I am going to go over it with you. If you are creating an opening balance for a new fiscal year then you should use the accountant’s Balance Sheet figures. If you do not have this, then grab your bank statement.

All your accounts that were set up either by you or QuickBooks will have a zero balance in them until you enter figures or data into them. So let’s start with the bank account.

Go to your Home page and the module that is next to Vendors to your right is the Company with the Chart of Accounts in it. Clicking on the Chart of Accounts will open the window where you will see the account list.  On it you may see several types of accounts such as Asset, Liabilities, Income or Expense.

If you do not see a bank account you will need to add one. If you did set one up then you may need to edit it if there is no balance in it.

Right click on your mouse will open a window from which you can then select New or Edit, depending on whether you have set up the account. I will lead you through the setup for a new account since the second screen is essentially the same in New, as the first screen in Edit.

Choosing New will open a screen where you need to choose the account type, which will be Bank. The Continue tab will then take you to the Add New Account screen. Working your way down from the top, fill in all the fields except for Tax-Line Mapping and the reminder to order cheques, unless of course you have laser cheques already.

Clicking on the Enter Opening Balance tab will direct you to a page where you will use the figure from your previous bank statement. The start date of your company’s operations will determine which month’s bank statement you will use. If you are setting the bank account up in the middle of the year, then take the last reconciled bank balance.

Don’t forget that this is the ending bank balance from the previous month.

Say OK and then click on Save and Close. You may get a message about online banking services, which I will cover in another article, but for now click on No. This will take you back to a screen on which you will see the newly created bank account along with its balance.

You will not have to create an Accounts Payable or Receivable because QuickBooks will create this for you when you add the first vendor (A/P) and customer (A/R).

Journal Entry for Opening Balances – this method would be used when creating your company file during your fiscal year, say the first quarter.  Make sure that you are working with the prior month’s closing Balance Sheet figures!

Go to your Home page and above it at the very top you will see the menu bar which starts with File on the far left. Scan your eyes to the right until you find Company.

Click on that and it will open a list, and near the bottom of that list you will find Make General Journal Entries. Choosing that will take you to the journal entry page. The date that you enter should be the ending of the previous month, then tab once to the Entry No. and type in Opening Balances.

Make sure the Adjusting Entry box has a check mark in it. Only check this box when making adjusting entries, otherwise leave it unchecked. The next tab will take you to the Account field.

Click on the drop down arrow and select the account that corresponds with the prior month’s Balance Sheet account. If you have not set it up in QuickBooks, then follow the steps I described above to add it your Chart of Accounts.

Instead of clicking on the down arrow button you can start to type the name of the account in the blank field and if you have set the account up already, it will fill in the name for you. Tab to the Debit or Credit field and enter in the amount, then tab to the Memo field. In it type Opening Balances, then tab until you get back to the Account field again.

Repeat these instructions until you have entered all the account balances. Your check on this entry will be if the Totals field balances. If it does not, then QuickBooks will not allow you to Save and Close (post it).

If the journal entry had some complicated accounts and you cannot figure it out, then it’s time to call your QuickBooks Trainer or your ProAdvisor.

Next I will take you through List, Customer and Vendor setup in this QuickBooks training.

Remember that you can follow me on Twitter for tips and updates also.


60 Responses to “Setting up Bank Accounts and Opening Balances”

  1. Thank you. This info was very useful

    • Larry Johnson says:

      Your welcome. Watch for more as the site expends on the topic.

      • So it’s ok just skip the Opening Balance Equity account? I wasn’t really sure why Quickbooks recommends using it when you could just set up the complete chart of accounts and make a journal entry directly to individual equity accounts.

        • Larry Johnson says:

          John, the Opening Bal Equity account is used to balance the entries. I have seen many books over my years where there is a balance in that OPE, that sits there forever. At some point it needs to be cleaned up, because in reality, it most likely is an adjustment of some sort.

          • Larry,
            I have a problem that I can’t seem to get my pea brain wrapped around. Whether I enter checks “written” in “Make General Journal Entries” or the “Check Register”, they debit from my balance (ok so far) but then immediately “re-credits” the amount of the check to my bank account, making my running-total “Balance” wrong.
            Can you point me in the right direction?


          • Larry Johnson says:

            Hugh, this would be a tough call, since I can’t see what you are doing. Questions: What version of QB’s are you running? Why use the Make General Journal Entries for a check? Why not the Write Cheques icon on your Home page? If you use the Check Register, are you putting the amount in the PAYMENT column?

          • Please explain more about “create the account that corresponds with the prior month’s Balance Sheet account”.

          • It is self explanatory in the blog, please re-read that.

          • We thought we wanted to set up QuickBooks as of 12/31/2015; so we did and started to enter January and February transactions. We found it so easy to enter transactions into QuickBooks, we then decided we should have setup our QuickBooks file as of 6/30/2015 to correspond to the start of our fiscal year.

            How can we do this change in the file we are already working on?

          • Just go to your Company Info & change it there.

  2. Well that was simple, straightforward and to the point – took a full 2 minutes to get the answer and action – pity I have just wasted an hour trying to get the answer through QB help!!!

    I WILL be back!

    Many Thanks,

  3. Tim Prince says:

    If you’re entering previous months bank statement balance….how do you account for the outstanding checks/DIT? We are converting to QB for an existing company and have a few issues with history in several accounts.

    • Larry Johnson says:

      Hi Tim, it depends at what stage you are entering in the new figures. Is this at the fiscl year or month end? All figures entered, depending if they are Balance Sheet or Profit & Loss, will have an opposite entry to the Opening Balance Equity.
      It also depends if you are accounting for the Vendor & Customer balances. Let me know if I can help you as we could do this virtually.

  4. How do I change an opening balance on a other asset account? Do I need to do a JE?

    • Larry Johnson says:

      This is way to much of a generic question without seeing your company file, but I will give you guidelines. Depends on the date that the opening balance was recorded. If you have filled your tax return then no. If you have submitted Financial Statements to a banking institution, then no. Otherwise, just edit the transaction and change the account as long as you are not changing it to a liability or equity.

  5. I have taken over my sisters books, and her bank balance is way out, can i do a journal entry and adjust the balance so it matches Dec 31 2012 bank balance? It is driving me crazy to see that there is 62,000 in the bank when in true actuality there is 6450.98 help!!!!

    Thank you

    • Larry Johnson says:

      Hi Shelly. In accounting terms we call this a plug. Yes, you could do it but then you would have to explain this if you ever got audited or to any accountant that peruses your books. $6,450.98 is material in natural and is not like plugging a figure under $!00. This figure might cause your Profit and Loss or Balance Sheet Statements to be overstated. Many scenarios may be causing this from a cheque, deposit, payment, credit, etc.

      Try running a report under Reports/Banking/Reconciliation Discrepancy to see what might be causing this amount to be out. If this does not solve the problem then I would have a QB Certified ProAdvisor look at it. In the meantime, move forward and keep in mind next time you reconcile the bank you will have to make allowances for that figure.

    • I was wondering if you could help me with something, your tutorials have always been easy to follow and I can usually find what I’m looking for on your website for my QB questions however this question requires some explaining. I am from Hamilton Ontario and I book keep for my husband’s construction business. We have a Home Depot credit card which we got for personal use to purchase appliances, when that is paid off we planned to use it as a company credit card however my husband has gone ahead and used it for company purposes :s I was wondering if I could create that credit card in QB and when it is used for company purposes have him pay the credit card using our business account and when we plan to pay off what we owe for our appliances use our personal card which I have made an account for in QB called Shareholder Loan (this was created by advise from a quick books advisor we hired when I first started using QB and had to historically input information as a fix for my husband using our business card for personal use when he forgot his personal card at home. Essentially it’s a dump account for when that happens but it doesn’t happen often anymore) when he made just 2 transactions last month (with our home depot credit card) for a job, I entered it in QB by putting money into my petty cash account which had to be transferred from our “shareholder Loan” (dump\personal account) so that I could track money spent at that certain job without messing up my business reconciliation, and made the purchases through my petty cash account. However in August there a more transactions using the Home Depot Credit card and I don’t want to keep putting the transactions through petty cash when the money is being transferred from our personal account. Please help!! Thank you so much in advance

      • Hi Christi,
        I believe you said you already have set up a credit card in QB’s, so.. when you enter in a credit card charge that is for business allocate it to the proper business account. When you enter in a personal credit card charge with that same card, allocate it to the Shareholders account in its totality. DO NOT break out the sales tax for that entry as a personal charge does not receive the benefit of the ITC (Input Tax Credit). Just pay the card as you normally would do without any entry to the Petty Cash account. Hope this helps.

  6. Hi Larry,
    What is the opening balance I should put in bank account QB2012 . Is it ending balance of my bank statement. We are starting fresh from January 1st, 2013.

    • Larry Johnson says:

      More complicated than that. Mainly because of the uncleared cheques or deposits. But in order not to hold you up, it would be the ending Dec.31 bank balance. You will though have to account for the uncleared bank transactions. Speak to your accountant about that.

      • Our company is doing the same thing. The former bookkeeper messed up the books so the owners decided to start a brand new set of books. I have the ending bank balance for 2014 but how do I account for the outstanding checks, deductions, payroll ACH’s & deposits if any. The company doesn’t have a cpa or controller to ask at this time. Help! Thanks

        • Hi Jane, You need to find a clear point and use your Trial Balance figures to use as your opening balance figures on that date. If it is end of your fiscal year, then the accountant will have filed a return for the company and you can ask for their Working Trial Balance numbers. This will cover the Balance Sheet and Profit and Loss accounts. You would enter those as at the end date of the fiscal year. If it’s in the current fiscal period, you will have to take an ending month balance. These will all be journal entries, and because I don’t have enough time to explain all this, my suggestion is to Google for a QB ProAdvisor in your area, as they will have accounting experience also, but make sure to ask that they do.

  7. I am opening my business checking account this week for my business (I sell real estate). I am also setting up QB. I’d like to have all of my 2013 income and expenses in QB, however, because I was very naughty and mingled my commission checks and my expenses with my personal checking and credit card accounts, I don’t want to even attempt to put those account balances into QB. I just want to start with my fresh bank account and designated credit card. Should I just make life easy for myself and just enter all income and expenses from this point forward in order to correspond with my new bank account and credit card account? Or is it possible to enter the 2013 income and expenses, and not have them correlate with any bank or cc account? I hope this makes sense… as my poor business management of my finances over the last few years does not! 😉

    • Larry Johnson says:

      Hi Jen,
      I would set up a Excel spreadsheet for your previous year and use a tab for Income and one for Expenses. Enter in all the pertinent date and then hand it over to your accountant.
      Next set up a new company file in QB’s. Make sure to set up a credit card account and separate the business from personal transactions. Next, enter in the opening balances for your chart of accounts that pertain to your Balance Sheet from your previous fiscal year. This information will come from your financial statements “Balance Sheet`.
      Then carry on with your current year information in QB’s for your business. You will need help with this from either an accountant who is QuickBooks trained or a QuickBooks Certified ProAdvisor.
      Hope that helps.

  8. Hi, Larry!
    Very useful post!
    I’m starting a new QB file for the 2014 fiscal year. I understand that I should make a general journal entry for the balance sheet accounts as of 12/31/2013. What about the income statement accounts- sales and expenses? Do I leave the balances at $0 since it is the beginning of the fiscal period?
    Also, how do I enter inventory items? And what do you suggest regarding Accounts Payable and Accounts Receivable? How should I enter the unpaid purchase invoices and sales invoices?
    Thank you!

    • Hi Sara, at the end of the fiscal year, the Income Statement accounts get closed by QB’s to Retained Earnings, that’s why you only enter Balance Sheet accounts, for the new Company File.

      See my blog on how to Export/Import Inventory Items. Also see blog on Exporting/Importing Lists, i.e. Customer & Vendor.
      If you have a lot of either, and many Invoices or Bills, then you will have to start with Opening Balances for Customers & Vendors. See blog on that.

      I would then use your old data info for the history, until all old Invoices & Bills are paid.

      Your Payments for Customers & Vendor, for each, will be applied to an overall outstanding balance.

      Enter any new data as you work in the new fiscal year.

      Hope this helps.

    • Sandy Coelho says:

      Hi, Larry … I set up my QB Non-Profit at the beginning of July and did not put in an Opening Balance…. I am ready to reconcile and thought I would set up the opening balance as you suggest above but when I go to the bank screeen in the COA and click edit opening balance it brings me to the check register? Should I put the ending bank balance from the last bank statement as a deposit and if so what will be the account that I will use?? Thanks for your help and advise.

      • Hi Sandy, are you using Desktop or Online QB’s and what version? Pro, Premier, Enterprise Solutions? What you did was double clicked on the bank. You need to highlight the account and RIGHT click to edit it. Then click on CHANGE OPENING BALANCE and yes it will then take you to the Register. You then need to put in the ending date of the last statement, amount and deposit. But remember, you may/will have cheques and deposits that were written in the previous month that will clear in the month you are completing. You can either enter them in or make a journal entry to compensate for the amount that you will have to clear. Use the OPENING BALANCE EQUITY account as the offset account. Hope this helps.

  9. Meggan Church says:

    Hi Larry…I stumbled across your site today…very informative!!
    We have setup a new company file beginning with our new fiscal/calendar year…when entering the unpaid invoices for AR or unpaid bills for AP, do I re-enter with their original dates or the first day of the fiscal/calendar year…we still want to be able to print accurate statements and open invoice details so we want to have the open history detailed by invoice instead of as a lump sum total.

    • Hi Megan, it depends how much historical info you want. You can enter it as a lump sump for Customers and Vendors as at a specific fiscal year-end date. It does make the reconciling a whole lot more tedious.
      If you need the historical data, i.e. invoice numbers, amounts and jobs, then it will have to be done by re-entering all those invoices or bills for Vendors.
      Speak to your local ProAdvisor and see if that person has a QB’s add-on that will export/import the transactions into the new company file, which would save you a whole lot of time.
      Search my site, because I did write an article on that subject and the name of the software (QB’s Add-on).

  10. How do I set up a new set of books on QuickBooks using the balance sheet from a tax return? Do all the line items get entered the chart of accounts?

    • This is going to be very difficult for you unless you are experienced in tax return reporting because accountants’ group many accounts in the Balance Sheet. For example in your Fixed Assets, depending on your particular industry and how sophisticated and detailed your internal books are kept, they may have grouped them into Equipment & Machinery or Furniture and Equipment.
      In those accounts may be Office furniture, Computers, photocopier, telephones, fax machine, etc.
      Ask them for a working copy of their Trial Balance, which will have ALL the individual accounts, with the final totals that they would use for reporting. These should be grouped by Balance Sheet and Profit and Loss accounts, along with the account number they used.
      That way you can see what accounts are entered and with what amounts. To be consistent, I would use the same account numbers they are using.
      If you are unsure of the correct procedure, please call your local QB’s ProAdvisor or speak to your Accountant.

  11. Elizabeth Luff says:


    I am entering my opening balances in a new accounting software, and do i need to include revenue and COGS? Typically, what accounts are in the opening balance? I entering for a new month. Please help!

  12. I want to set up my check register to show debits and credits instead of increase and decrease…I’ve made that change before when setting up a new account, but I can’t remember how. Thanks!

    • Hi Martha, I can’t help you there as I’ve never changed that nor could I determine how you would change a QB template in the Register. You could do that if it was a Report, by Customizing the Display. Let me know if you can solve that, and how you did it.

  13. New Accountant says:


    Im the new accountant for my company. Company has had various BAD bookkeepers so I’m starting a fresh QB file. I was wondering if it’s ok to use the Ending Balance of a bank statement for opening bank balance in Quickbooks. The ending balance on the Bank STatement is fiscal year end.

    • Hello new accountant, it would be nice if at least you could use your first name. Yes its okay to use the ending balance of a bank statement. But… remember that there will be cheques that have not cleared that will cause a problem. These may have been used to pay a Vendor. Also, you will have to make sure that any deposits are accounted for in regards to your Customers (A/R).This is too long a comment for me to guide you through, so I would suggest you contact your local QB ProAdvisor to help you through it, or it will be a mess to fix once you start. Let me know how you make out.

  14. Rachel Litmer says:

    Larry: I, through various circumstances, have lost both of my backup to my QB 2015, and with it, thirteen years of records.

    I need to setup 2014 so can get my taxes done, but I am having a heck of a time.

    I am trying to do this through the General Journal.

    I don’t know how to enter the balance forward. I also entered the payroll already, and that seems to have messed me up.

    Any advice?


    • Hi Rachel, first I would contact Intuit because if you send them your Company File, they may be able to rescue it. Not sure of the cost, but it would be worth it.

      Re. the balance forward, this is really complicated and I would advise you to contact a QB’s ProAdvisor in your area, before you spend any more time. It will be a worthwhile investment.

      Make sure and ask if that person has experience in setting up a company file using opening balances from a previous years financial statements. Do not, under any circumstances let that person learn on the job at your cost.

      Are you in Canada? If so where. Give me a contact number so I can speak to you to see if I can help you.

  15. I am creating a new data file for my company. I am starting with all the ending balances from the last statement. After those balances are in how do i put in all the uncleared transactions?

    Thank you

    • Hi Kira, there is a couple of ways to do this. One would be to treat the uncleared cheques as actual A/P payments and the other would be to adjust those total amounts to the Opening Balance account when you do the bank reconciliation.

  16. Hi,
    I started doing the accounting in QB for a management company for HOA’s. I received the Income statement and Balance sheet ending 7/31/15 from previous accounting person. I am starting my books as of 8/1/15. From which report do I input a journal entry into QuickBooks to get started? The income statement shows the amounts for the chart of accounts balances so I put them in a journal entry. Then I made another Journal entry with the balances from the Balance sheet. Not sure which is correct. The amount on the Balance sheet for the 2 bank accounts do not match the bank statements but it’s probably because there is an outstanding check.
    Please help! Thank you

  17. Hi Larry,

    I am new to quickbooks.

    Ours is a new company and we have a new business bank account. When opening the business bank account, I also deposited some checks as opening balance.

    When I created the company bank account in quickbooks I entered the checks total amount as the opening balance. Now I think I made a mistake and want to show the opening balance as zero and the checks as bank check deposits.

    When I try to edit the opening balance to zero, I am getting a prompt that says the amount is already reconciled and the statements will not match if I edit the opening balance to zero.

    How do I handle
    – changing opening balance to zero
    – entering the bank check deposits

    Thank you for your help.


  18. Hi,
    I’m trying to open a new quick books for my client’s accounts. I have several individuals that I need to do separately. I have been using quicken for years and I’m trying to upgrade. How do I start putting the clients names in as well as their balances? Help

  19. Our financials were being produced by another company and I have taken it back over. I see that they entered in the wrong beginning balances into Quick Books. Instead of using the Balance Sheet from 2015, they used the ending balance on the bank statement. Now they have entered in checks from Nov and Dec of last year that had not cleared. I need my only entry for Dec 31st 2015 to be my ending balances. How can I correct the beginning balances so that my balance sheet matches to the other company for the year 2015? How do I account for the outstanding checks that have not cleared? Do I delete all of the entries for those checks that they did because they needed them to reconcile the last few months bank statements?

  20. Hi Larry

    I am trying to setup Quickbooks for my farm with a start of January 1, 2017. I have been using one bank account for business and personal expenses. On Jan 20th I separrated this account into a business account and a personal account at the bank. I have overdraft protection on this account ( line of credit) and it was in the negative on January 1st. Can I use this negative number as my Opening Balance Equity? Thanks.

    • Kurt,
      although the LOC has a value to it, it doesn’t really need to be set up. On your bank statement when it goes into an overdraft position, it stays as an overdraft, and the bank honours that overdraft up to the limit you have established.
      That same overdraft will appear in the same fashion in your Quickbooks as a minus number in your operating bank account.

      Don’t forget to enter in the interest charge on the amount used from the LOC as an Interest Expense charge.

      At the end of the fiscal year, the accountant will move the bank amount, if it is in a minus amount, to a liability account on your Balance Sheet called Bank indebtedness.

  21. I have a company that is new to our company. They only provided us with a tax return and bank statements to begin their bookkeeping. And the bank statement has a beginning balance. What part of the tax return can I use to setup this company in quick books?

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