Understanding and Fixing Opening Balance Equity in QuickBooks

[@chuckanderson2014]

Great information Looking Forward to more. Thank You

[@robinvilla-real3944]

Great! But I still had two questions. What if I'm starting a new file from an already opened company. How do I account for Sales Tax and Payroll Liabilities? When setting up a previously open company: 1. Sales Tax Adjustment: After entering open invoices at year end, it will have a sales tax balance on the invoice. How do you adjust that? and where? Opening balance equity? 2. Payroll Liabilities (from outside payroll): Do you enter the payroll liabilities with the J/E of the balance sheet balances? Or separate? And how do you adjust for that? 3. If a client gave me their Trial Balance, and I've entered everything and adjusted out opening balance, is my QuickBooks Trial Balance supposed to match the client's trial balance?

[@nagdevsneha]

I notice that there is a large amount in the Opening Balance Equity account.Which 3 reasons could be causing this balance? 1.The client has added transactions in the Banking Center without assigning an account to them 2.Opening balances for one or more Product/Service items were entered during the setup process 3.The client entered an Opening Balance when creating a new Other Current Asset account 4.Opening balances were included when importing Customers, using the Import Data tool

[@paulabaquero9913]

Hi thanks so much for this video it’s super helpful!!! Though our opening balance equity I account is negative, what would that mean?

[@SquireCPA]

Robin Villa-Real +Сергей Сабуров With Sales Tax, I would start by using a sales tax adjustment transaction and offset it against Opening Balance Equity as part of the initial setup process. Using an adjustment instead of a journal entry ensures that the Payroll Liabilities report is accurate. For the Payroll Liabilities, if you are using Intuit’s QuickBooks Payroll, I would use the included setup wizard to establish beginning liabilities so that they factor correctly in the payroll center and your payroll forms. If you are using an outside (third-party) payroll provider, than a journal entry is fine and they can all be combined with the other balance sheet items in a single transaction. As mentioned in the video, it is OK to use the Opening Balance Equity as a holding tank for these initial setup transactions, just make sure that it is zeroed out when the setup is complete.

[@JJ_TheGreat]

Thank you for the video! Quick question: Let’s say I had just opened a new bank account for a company. Then I go into QuickBooks to setup the account. I enter all of the balance sheet accounts to setup the Balance Sheet. That opening balance for the new bank account goes to Opening Balance Equity as the offset account. I look closely, maybe run a Trial Balance and ensure that the Trial Balance nets out to zero. At this point, would it be ok (after talking to my tax professional) for me to move the Opening Balance Equity to Retained Earnings? Thanks.

[@707arsanchez]

I have never entered any banks in quickbooks or starting Money . so i have since 2007 til 2022 undeposited funds , how do i i enter to offset it and zero out ;( ?

[@aniciavandyke9809]

Thank you! I found this very helpful.

[@Uther1313]

This is very helpful to me. Thank you!!!!

[@deannalafave1716]

How do you zero out OBE in a prior period? In 2014 the previous bookkeeper credited income and debited OBE. I know what accounts should be used, but it will effect 2017 balances, that's what I am not sure what to do. This is for a nonprofit

[@floriavu703]

It was greatly helpful! Thank you!

[@odoombusinessconsult6195]

this is really helpful

[@mlreding]

Did you have to customize that report at the end to not show the zero'd out Opening Balance Equity as a line item on the Balance Sheet? After I've used the journal entry to zero this out, it still shows on my Balance Sheet, but as 0.00.

[@ronnies6811]

you can customize the report to not show zero balances

[@ericahoxie269]

This was very helpful!!! Thank you.