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QuickBooks has been undoubtedly regarded as one of the powerful tools to manage your business’s finances effectively. From large scale businesses to small scale businesses, QuickBooks stands out to be of great potential for one and all.
Dancing Numbers helps small businesses, entrepreneurs, and CPAs to do smart transferring of data to and from QuickBooks Online. Utilize import, export, and delete services of Dancing Numbers software.
While you are working on the QuickBooks software, there are a few areas where you would be needing assistance. One such subject is how to enter outstanding balances for customers and vendors in QuickBooks Online.
Speaking of which, the correct methodology that needed to be purposed for entering outstanding balances for customers/vendors will be dependent on the time you would start making use of QuickBooks Online.
In generic terms, it would be based on whether you had balances prior to using QuickBooks Online as that of the start date. Also, it can be based on posting your start date.
What is Outstanding Balance?
Defining in very simple words, the outstanding balance can be understood as the amount of money which you have borrowed but won’t be repaid in full when the due time comes. The lender would be using the amount for calculating how much interest is owed on the borrowed sum of money for the respective statement period.
How to Enter Outstanding Balances for Customers and Vendors?
This article will guide you effectively with a stepwise understanding of how to execute the entering of outstanding balances for customers and vendors in QuickBooks Online.
How to Set up a Customer Opening Balance?
Let’s start with how to set up a customer opening balance:
Step 1: The first step for setting up a customer opening balance would need you to open QuickBooks Online and choose Sales.
Step 2: Tap on Customers.
Step 3: From the upper right, choose New Customer.
Step 4: Enter customer information.
Step 5: Visit Payments and Billing. You would find the Payments and Billing option between the Tax info and Language tabs.
Step 6: Here you can enter Opening Balance with the date on which you have started your QuickBooks Online account.
Step 7: Click on Save.
What Accounts are impacted When Entering a Customer Opening Balance?
One thing that you must keep in mind is that in case you wish to have a track record of individual sales or bills which essentially adds up as your customer and vendor opening balances, then you need to enter each unpaid invoice and an unpaid bill.
Make sure that you are entering each unpaid invoice and unpaid bill in replacement of entering a cumulative balance for each of your respective customers and vendor.
Also, while you are entering an opening balance, in which you would be doing a customer setup, a few accounts are impacted for the same. These accounts are:
- Accounts Receivable (A/R) or Trade
- Other Receivable accounts
One account which you would find to be created in a default manner when you create a QuickBooks Online subscription is the income account. You would be able to see it in the Credit column on the transaction journal.
You can also choose to edit your income account only after the original transaction is being created.
How to Set up a Vendor Opening Balance?
Now let’s head towards setting up a vendor opening balance:
Step 1: The first step for setting up a vendor opening balance would need you to open QuickBooks Online and choose Expenses.
Step 2: Tap on Vendors.
Step 3: From the upper right, Choose New Vendor.
Step 4: Enter vendor information.
Step 5: Here you can enter Opening Balance with the date on which you have started your QuickBooks Online account.
Step 6: Click on Save and Close.
Similarly, while opening a customer balance few accounts get impacted, when you are entering an opening balance, alongside doing a vendor setup, the impact would be visible on a few accounts likewise.
These accounts are:
- Income and Accounts Payable (A/P) or Trade
- Other Payable accounts
One account which you would find to be created in a default manner when you create a QuickBooks Online subscription is the Expense account. You would be able to see it in the Debit column on the transaction journal.
As follows for setting up customer balance, for vendor balance too you can also choose to edit your expense account only after the original transaction is being created.
Now that you have understood how to deal with entering outstanding balances for customers and vendors in QuickBooks Online, the next thing to make a critical note of understands what Outstanding Balance is.
Hopefully, the grey areas of being stuck at entering outstanding balances for customers and vendors in QuickBooks Online are now sorted for you. The above-mentioned steps and information should act as helpful pointers to get you going while you are performing the entering of outstanding balances for customers and vendors in QuickBooks Online.
If you still feel this article wasn’t enough to help you with vivid detailing on inputting outstanding balances for customers and vendors in QuickBooks Online.
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+1-800-596-0806 or chat with experts.
Frequently Asked Questions
How can I Edit the income Account Which has been Assigned to the Opening Balance?
If you wish to edit the income account which has been assigned to the opening balance, then you need to:
Open QuickBooks Online. Choose Sales and tap on Customers. Choose the respective customer. Click on Opening Balance Invoice. Tap on the dropdown which you find in the Product/Service column. Choose a separate item/add a new line. Hit Save.
How can I Edit the Expense Account which has been Assigned to the Opening Balance?
If you wish to edit the expense account which has been assigned to the opening balance, then you need to:
Open QuickBooks Online. Choose Expenses and tap on Vendors. Choose the respective vendor. Click on Opening Balance Bill. Alter the expense account/add a new line. Hit Save and Close.
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