This article explains what opening balances are, why they matter when migrating data from a previous system to Qoyod, and how they appear in the organization’s financial statements.
Definition of Opening Balance
The opening balance of the current fiscal year is the closing balance of the previous fiscal year. It includes balance sheet accounts (permanent accounts), but not income statement accounts (temporary accounts), which are closed annually into the profit and loss account. That closing appears on the balance sheet as Retained Earnings.
Why Use Opening Balances
The feature is used to migrate account data from a previous accounting system to Qoyod, and covers all permanent accounts:
Assets
Economic resources owned by the organization, such as:
- Inventory (products and costs).
- Bank and cash.
- Receivables (customers).
Liabilities
The organization’s obligations to third parties for goods, services, or loans received, such as:
- Payables (suppliers).
Owner’s Equity
The funds the owners hold in the organization, such as:
- Capital.
- Retained earnings.
How Opening Balances Are Reflected
The opening balance appears in balance sheet accounts and is automatically recorded in the journal.
