Opening Balances Sage

Sari SariSari Sari New MemberRegistered Posts: 7
Hi All,

I was hoping someone could offer some advise re Sage opening balances.

Firstly, I prepared my own opening trial balance from the balance sheet from last years accounts which was prepared by my accountant.

The trial balance was ok, and I listed all assets as debits, and liabilities as credits.

I then proceeded to post the figures to sage using April 1st as the starting date. This being the start of my new financial year.

All entries were made using suspense as the corisponding part of the double entry, and once completed, the suspence was nil.

However, upon posting live data for the first quarter of this year, (april to june)I noticed that when posting rent of £3,456, sage deducted the opening balance of £1,663, therefore only showing rent for the first quarter of this year as £1,793.

As this opening balance for rent was included in the current liabilities section of the balance sheet, I posted it to sage as a credit.

It would appear to me that as a result, the rent for this year will be understated, and not correct?

Being just a student, the real world of accounting can be quite different from the clasroom examples we work to while studying. I do not attend college, so I can not ask my teacher for help.

I hope someone can shed some light on this for me.

Merry Christmas to you all.

Regards,

Sean

Comments

  • Anne BoleynAnne Boleyn Well-Known Registered Posts: 196
    Opening balances

    Hi Sean

    As you have an accountant I'm sure they would explain this to you. However it is probable that the closing figure was probably an accrual/creditor for rent. The invoice had been received and entered in the accounts but payment had not been made at year end, hence the creditor. When you create opening balances this sits as a credit in the account awaiting the bank payment to clear it.

    example: Year end 31/03
    invoice received 28/02 £1663 for rent (paid on 05/03)
    DR rent 1663
    CR bank 1663

    invoice received 31/03 £1663 for rent (paid on 07/04)
    DR Rent 1663
    CR Creditors 1663


    When you come to post bank payments the first one for rent (on 07/04) pays off the credit balance in the rent account and so it continues. Creditors are often caused by timing differences.

    I hope this helps.
  • Sari SariSari Sari New Member Registered Posts: 7
    Hi Ann,

    Thank you for your reply.
    This did help.

    Mery Christmas,

    Sean
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