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 has 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.
What might your opening balances include?
Your opening balances as at your FreeAgent start date may include some or all of the following:
- money your customers owe you
- money you owe to your suppliers
- the balance(s) on your bank account(s)
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. Please note that our support team can’t help you with this as we’re not authorised 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 at 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 stock balances
If you had items in stock as at your FreeAgent start date, create new stock items and enter the opening quantity and value of those items.
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 profit or loss reserves and loan 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’. Find out more about how to import your opening balances.
Alternatively, to add more opening balances, select ‘Edit Opening Balances’.
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’.
Adding loan balances
If you’ve received a bank loan or are paying off a hire purchase loan, add a new liability category and enter the outstanding balance as it stood at your FreeAgent start date as a credit to that category. Find out more about how to deal with a loan received.
If you’ve provided a business loan to another business or an employee, add a new asset category and enter the outstanding balance as it stood at your FreeAgent start date as a debit to that category. Find out more about how to deal with a loan provided to a business or employee.
Editing your opening balances
If you need to make any changes to your opening balances, find out how to edit your opening balances.