What an opening balance is

An opening balance is the amount in each account on the day your books begin in Sapita. It is the starting point for every report that follows. If the opening balances are wrong, every later report carries the same error.

When you need one

You need opening balances when you start using Sapita for a company that already exists. The company may have been keeping its books somewhere else, or it may have kept none. Either way, the first period has to start from the true position of the company on that date.

What goes in

Each account has one opening amount. For a typical company that includes:

• the money in the bank account, with the bank statement balance on the chosen date,
• the cash kept in the office, if there is any,
• amounts customers still owe you (receivables),
• amounts you still owe suppliers (payables),
• the value of equipment you own, and
• the share capital and any owner loan.

The rule that must hold

The opening balances must balance. Add up every debit amount and every credit amount. The totals must be equal, because double-entry bookkeeping does not allow anything else. Sapita checks this before it starts the first period.

Common mistakes

• Using a bank balance from a different date than the one you chose.
• Forgetting an owner loan, which makes the balance sheet look as if the company owns more than it does.
• Entering a supplier invoice that was already paid as if it were still open.

Sapita helps you check each figure against the source document. The figures themselves come from your records.