How to enter your opening balances

This article explains how to enter your opening balances as part of FreeAgent's account setup process.

If your business is a limited company and you’ve been trading for a while, you'll have some opening balances to enter when you first begin using FreeAgent. These are your figures as they stood as at your FreeAgent start date. FreeAgent needs to include this brought-forward information in your accounting reports.

As brought-forward balances don’t impact the tax return for the current year of a sole trader, partnership or LLP, a full set of opening balances may not be required for these business types.

We recommend you enter the opening balances before you file your first VAT return as once that VAT return is filed, you won’t be able to edit entries to accounts ‘818 - VAT Reclaimed’ or ‘819 - VAT Charged’.

What might your opening balances include?

Your opening balances as of your FreeAgent start date may include some or all of the following:

  • money your customers owe you (your accountant might call this ‘trade debtors’)
  • money you owe to your suppliers (your accountant might call this ‘trade creditors’)
  • the balance(s) on your bank account(s)
  • money you owe to HMRC for PAYE and NIC, or VAT

Please note that you’ll need to have full (level 8) access to your FreeAgent account to be able to enter opening balances.

Where to find your opening balances

If you’re starting to use FreeAgent at the beginning of a new financial year, you only need to put in balances for your balance sheet accounts, such as money owed to you by your customers.

If you’re starting to use FreeAgent mid-way through your financial year, you may also have entries for the year to date for your profit and loss accounts, such as income the business has earned since the beginning of this financial year.

Your accountant should be able to supply you with a trial balance (a list of all the balances in your accounts) as at your FreeAgent start date and will be able to advise which entries you need to record in your FreeAgent account. Unfortunately, our support team can’t help you with this as we’re not authorised by HMRC to provide accounting advice.

You can export a chart of accounts to find a full list of the categories available in your FreeAgent account and add a new category if you need to.

How to enter your opening balances

You can either import your opening balances into FreeAgent or enter them manually by following the steps below.

Adding bank account balances

To enter your bank account balances, navigate to the ‘Banking’ tab at the top of the screen, select ‘Bank Accounts’ from the drop-down menu and select the relevant bank account from the list. From the bank account page, select ‘Edit Details’ at the top-right and enter the balance as of your FreeAgent start date. Enter a minus sign if the balance is money you owed to the bank, such as an overdraft or loan.


You may have entered the opening bank balance when you set up your account, but we recommend that you check that the figure is correct. 

Adding a bank account for a loan

To add a new bank account for dealing with a loan, follow the steps in this article and enter the outstanding balance as it stood at your FreeAgent start date, including a minus sign at the start of the figure. FreeAgent will then add this as a credit figure in your opening balances.

Adding stock balances

If you had items in stock as of your FreeAgent start date, create new stock items and enter the opening quantity and value of those items. Please note that stock functionality won't be available if you have an unincorporated landlord account or if you're preparing your accounts using the cash accounting basis.

Completing your opening balances using journal entries

You’ll need to record the rest of your opening balances as a set of journal entries. This includes opening VAT, share capital and profit or loss reserves balances.

Navigate to the 'Accounting' tab at the top of the screen and select 'Journal Entries' from the drop-down menu.


From the 'Journal Entries' screen, choose 'Opening Balances' from the drop-down menu.


You’ll see that there is already a set of opening balance journals created. To import your opening balances from a .CSV file, select ‘Import Opening Balances’. For more information on how to import your opening balances, please see this article.


Alternatively, to add more opening balances, select ‘Edit Opening Balances’.


VAT opening balances

The balances you enter will depend on a few scenarios, for example whether the first VAT quarter in FreeAgent is a new one or if you’ve started using FreeAgent mid-quarter, and whether or not you’re on the VAT Flat Rate Scheme. Follow the guidance in the relevant article below:

Adding opening share capital

If your business is a limited company, you should enter the opening share capital for each shareholder as a credit to account code ‘901 - Capital Account’.

If any of the share capital was unpaid as at your FreeAgent start date, you are likely to also have a debit entry to account code ‘910 - Unpaid Shares’.

Adding opening profit or loss reserves

Any reserves of retained profits your business has built up over the years need to go in as a credit to account code ‘968 - Profit and Loss’. If the business is carrying a reserve of losses in its accounts as at its FreeAgent start date, that would be entered as a debit entry to account code ‘968 - Profit and Loss’.

If you have a limited company and need to enter a brought-forward loss for tax purposes, please see this article.

Editing your opening balances

For information on editing your opening balances, please see this article.

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