Overview

Take-on balances refer to the opening balances of accounts that are brought forward into a new accounting system, financial year, or when transitioning from one accounting system to another. These balances represent the financial position of the organisation as of a specific point in time, typically at the start of an accounting period.

Take-on balances are essential for maintaining continuity and accuracy in financial reporting, ensuring that the historical financial data is properly reflected in the new period or system. Accurate documentation and reconciliation are critical to the process.

These tutorials explain how to enter and verify take-on balances.

How to Systematically Capture Take-On Balances

1. Prepare the documents required.

2. Create all the necessary Ledger, Customer and Supplier Accounts.

3. Create an Opening Balance Control Account.

4. Enter the Balances as per the Trial Balance.

5. Enter the Fixed Assets (optional):

   1. The Fixed Assets will be entered as totals when entering the Trial Balance - see Option A as an example.

   2. If you prefer to enter the Fixed Assets in detail, you can leave them out when capturing the Trial Balance and enter them separately - See Option B. 

6. Enter the Customers

   1. Choose Option A to only enter one transaction per customer. Option A is best if:

      • Customers mostly pay the current amounts due, or

      • You collect the outstanding amounts by Debit Order.

   2. Choose Option B to enter the total outstanding amount per period. Option B is best if:

      • Customers only pay on 30 or 60 days, or

      • Terms vary among customers.

   3. Choose Option C to enter every outstanding transaction in detail. Option C is best if: 

      • You often have account queries

      • You often have to chase customers for payment.

7. Enter the Suppliers

   1. Choose Option A to only enter one transaction per Supplier. Option A is best if:

      • You pay suppliers the current amount due or on 30 days. 

   2. Choose Option B to enter the total outstanding amount per period. Option B is best if:

      • You pay suppliers on 60 days, or

      • You have varying terms with suppliers.

   3. Choose Option C to enter every outstanding transaction in detail. Option C is best if: 

      • Payments are linked to processes or consignments, or

      • Managers have to approve the payments and want to see the source documents. 

8. Perform a Quality Check.

How to Prepare for Take-On Balances

1. Prepare the following documents from your existing accounts:

   • Detailed Trial Balance that shows all sub-accounts.

     • Note: You can enter the full Trial Balance, including income and expenses, to have comparative figures or only the Statement of Financial Position items.

   • Fixed Asset Register (If you want to maintain a list of fixed assets in your accounting records).

   • Customer Age Analysis.

   • Supplier Age Analysis.

2. Choose a take-on method for Customers.

   • Note: If you choose detailed transactions, also prepare a detailed list of outstanding Customer transactions.

3. Choose a take-on method for Suppliers.

   • Note: If you choose detailed transactions, also prepare a detailed list of outstanding Supplier transactions. 

How to Create an Opening Balance Control Account

1. Navigate to Main Menu > Setup > Accounting.

2. Click the arrows to expand Statement of Financial Position > Liabilities + Equity > Liabilities > Current Liabilities.

3. Right click on Current Liabilities and create an account named: Opening Balance Control Account.

   • Note: It is unimportant where the account is created because, by the end of this tutorial, it should have a zero balance. 

How to Create Accounts for Fixed Assets

1. Navigate to Main Menu > Setup > Accounting.

2. Click the arrows to expand Statement of Financial Position > Assets > Non-Current Assets.

3. Right click on Non-Current Assets and create an account with the main name of your fixed asset (e.g. Office Furniture).

   1. Right click on the main name and create a sub-account named Cost.

   2. Right click on the main name and create a sub-account named Accumulated Depreciation.

4. Repeat Step 3 for all your Fixed Assets.

Entering Opening Balances from the Trial Balance

1. Navigate to the Main Menu > Accounting > Ledger.

2. Click New (button) > General Journal.

3. Choose the last day of the previous financial year as the Date and Period.

4. Type Opening Balance in the Reference field.

5. Leave the top fields blank, including Dr. Account, Cr. Account and the Amount.

6. Click the Add Item (button).

7. Click Menu (Button) > Enable Debit & Credit.

8. Type in Description = Opening Balance.

9. If the next entry on the Trial Balance has a debit balance:

   • Set Dr. Account = Account for Trial Balance Entry.

   • Set Cr. Account = Opening Balance Control Account.

   • Set VAT = No VAT.

   • Type in the Amount from the Trial Balance.

10. If the next entry on the Trial Balance has a credit balance:

    • Set Dr. Account = Opening Balance Control Account.

    • Set Cr. Account = Account for Trial Balance Entry.

    • Set VAT = No VAT.

    • Type in the Amount from the Trial Balance.

11. Enter the VAT Control Entry as follows:

    • Set Dr. Account = (leave blank).

    • Set Cr. Account = VAT Control.

    • Set VAT = VAT only.

    • Type in the Amount from the Trial Balance for the VAT Control.

    • Click Add Item (button):

    • Set Dr. Account = Opening Balance Control Account.

    • Set Cr. Account = (leave blank).

    • Type in the Amount for the VAT Control (The amount from Step d).

      • Note: This is the entry if you owe VAT. If you are due for a refund, the Debit and Credit Entries must be swapped each time.

12. Repeat Step 6 until all the entries from the Trial Balance are added.

    • Note: Exclude the Customer and Supplier Accounts.

    • Note: You can enter the Fixed Assets (in detail or as totals) as part of this journal entry or as a separate journal entry.

13. Click Done (button).

Entering Fixed Assets

Option A: How to Enter Fixed Assets in Total

If you entered the Fixed Assets while capturing the Trial Balance, skip this step. With this method, you will not have the history of what you bought, only the totals.

E.g. Afterwards, your Computer Equipment Account will show:

Opening Balance R50 000. 

1. Create accounts for the Fixed Assets.

2. Enter the Transactions:

   1. Navigate to Main Menu > Accounting > Ledger.

   2. Click New (button) > General Journal.

   3. Choose the last day of the previous financial year as the Date and Period.

   4. Type Opening Balance in the Reference field.

   5. Set Dr. Account = Cost Account of a Fixed Asset (e.g. Office Equipment).

   6. Set Cr. Account = Opening Balance Control Account.

   7. Set Amount = Cost Amount.

   8. Click Add Item (button).

   9. Set Dr. Account = The matching Accumulated Depreciation account.

   10. Enter Accumulated Depreciation as a negative number. 

       • Note: The total displayed in the bottom right should equal the Net Book Value of the asset.

   11. Click Save (button).

3. Repeat Step 2 for all the Fixed Assets.

Option B: How to Enter Fixed Assets in Detail

This step assumes you did not enter the Fixed Assets when capturing the Trial Balance. With this method, you retain the history of your asset purchases because you capture your assets one-by-one.

E.g. Afterwards, your Computer Equipment Account will show:

HP Laptop X23 R16 000 (purchased 12 Jan. 2024)

Apple Mac R22 000 (purchased 17 Nov. 2023)

Toshiba Printer R12 000 (purchased 6 June 2020)

1. Create accounts for the Fixed Assets.

2. Enter the Transactions:

   1. Navigate to Main Menu > Accounting > Ledger.

   2. Click New (button) > General Journal.

   3. Choose the last day of the previous financial year as the Date and Period.

   4. Type Opening Balance: Description of Asset in the Reference field (e.g. Opening Balance: HP Laptop X23 R16 000 (purchased 12 Jan. 2024))

   5. Set Dr. Account = Cost Account of a Fixed Asset (e.g. Office Equipment - Cost).

   6. Set Cr. Account = Opening Balance Control Account.

   7. Set Amount = Cost Amount.

   8. Click Add Item (button).

   9. Set Dr. Account = The matching Accumulated Depreciation account.

   10. Enter Accumulated Depreciation as a negative number. 

       • Note: The total displayed in the bottom right should equal the Net Book Value of the asset.

   11. Click Save (button).

3. Repeat Step 2 for all the Fixed Assets.

Entering Customer Opening Balances

Option A Customers: Only Enter the Total Outstanding Amount

1. Navigate to Main Menu > Customers > Customer Invoices.

2. Click New (button).

3. Confirm the pop-up to create a new Customer Invoice (if applicable).

4. Type in the last day of the previous financial year in the Date field.

   • Note: If you are doing a take-on in the middle of a financial year, type in the last day of the previous month.

5. Type in Opening Balance in the Reference & Note section.

6. Click Custom (button) next to Add.

7. Type Opening Balance under Description.

8. Select Opening Balance Control Account from the dropdown list under Account.

9. Select No VAT.

10. Enter the Customer's Total Balance on the Customer Age Analysis as the Amount.

11. Click Status (button) > Complete.

12. Repeat Steps 2-11 for every customer with an outstanding balance.

Option B Customers: Enter the Total Outstanding Amount per Period

1. Fill in invoice dates on your Customer Age Analysis.

   • For example, if your new year starts 1 March 2024 and you have an age analysis as at 28 February 2024, your dates will be:

120+ Days: 31 Oct 2023

90 Days: 30 Nov 2023

60 Days: 31 Dec 2023

30 Days: 31 Jan 2024

Current: 28 Feb 2024

Total: N/A

2. Navigate to Main Menu > Customers > Customer Invoices.

3. Click New (button).

4. Confirm the pop-up to create a new Customer Invoice (if applicable).

5. Type in the Date as calculated in Step 1 in the Date field.

6. Type in Opening Balance in the Reference & Note section.

7. Click Custom (button) next to Add.

8. Type Opening Balance under Description.

9. Select Opening Balance Control Account from the dropdown list under Account.

10. Select No VAT.

11. Enter the Customer's Balance per period on the Customer Age Analysis as the Amount.

12. Click Status (button) > Complete.

13. Repeat Steps 3-12 for every customer in the relevant period on the age analysis (i.e. Create one Invoice per period).

Option C Customers: Enter the Outstanding Transactions in Detail

1. Enter all the Outstanding Customer Invoices (repeat these steps for every outstanding invoice) as follows:

   1. Navigate to Main Menu > Customers > Customer Invoices.

   2. Click New (button).

   3. Confirm the pop-up to create a new Customer Invoice (if applicable).

   4. Type in the Date of the original invoice.

   5. Type in the original Invoice Number in the Reference & Note section.

   6. Click Custom (button) next to Add.

   7. Type Invoice under Description.

   8. Select Opening Balance Control Account from the dropdown list under Account.

   9. Select No VAT.

   10. Enter the Invoice Amount as the Amount.

   11. Click Status (button) > Complete.

2. Enter linked Customer Credit Notes (repeat these steps for every Credit Note):

   1. Navigate to Main Menu > Customers > Customer Credit Notes.

   2. Click New (button).

   3. Type in the Date of the original credit note.

   4. Type in the original Credit Note Number in the Reference & Note section.

   5. Click Custom (button) next to Add.

   6. Type Credit Note under Description.

   7. Select Opening Balance Control Account from the dropdown list under Account.

   8. Select No VAT.

   9. Enter the Credit Note Amount as the Amount.

   10. Allocate the Credit Note to any Outstanding Invoices (if applicable):

       1. Click Menu (button) > Select Open Transaction in Ledger.

       2. Select the Customer Invoice in the Outstanding section.

       3. Click Allocate (button).

   11. Click Status (button) > Complete.

3. Enter any Customer Receipts:

   1. Navigate to Main Menu > Account > Ledger.

   2. Click New (button): mouse over Customer Transactions and click Customer Receipts.

   3. Enter the Date and Period as per the Bank Statement.  

   4. Select the Bank Account next to Dr. Bank. 

   5. Select the Customer next to Cr. Customer.

   6. Enter the amount paid next to Total (Inc) and select No VAT.

   7. Enter a Reference and Note in the sections provided.

   8. Click View (button) and select Items to show a list of outstanding items.

   9. Allocate the Customer Receipt to the applicable Outstanding Invoices (see the Outstanding section on the bottom right):

      1. Click Allocate (button) to automatically allocate the receipt.

      2. Click Select to choose the invoices that were paid by ticking the box next to the applicable invoices.

      3. Click Done (button).

   10. Keep a running total of the amount of Customer Receipts entered.

4. Transfer the Customer Receipts to the Opening Balance Control Account:

   1. Navigate to Main Menu > Accounting > Ledger.

   2. Click New (button) > General Expenses.

   3. Enter the Date and Period of the last day of the previous financial year.

   4. Set Dr. Account = Opening Balance Control Account.

   5. Select the same Bank Account you used in Step 3 next to Cr. Account.

   6. Enter the Amount (as calculated under Step 3.10) next to Total (Inc) and select No VAT.

   7. Enter Opening Balance Adjustment as the Reference.

   8. Click Done (button).

Entering Supplier Opening Balances

Option A Suppliers: Only Enter the Total Outstanding Amount

1. Navigate to Main Menu > Suppliers > Supplier Invoices.

2. Click New (button).

3. Type in the last day of the previous year in the Date field.

   • Note: If you are doing a take-on in the middle of a financial year, type in the last day of the previous month.

4. Type in Opening Balance in the Reference & Note section.

5. Click Custom (button) next to Add.

6. Type Opening Balance under Description.

7. Select Opening Balance Control Account from the dropdown list under Account.

8. Select No VAT.

9. Enter the Supplier's Balance on the Supplier Age Analysis as the Amount.

10. Click Status (button) > Complete.

11. Repeat Steps 2-10 for every Supplier with an outstanding balance.

Option B Suppliers: Enter the Total Outstanding Amount Per Period

1. Fill in invoice dates on your Supplier Age Analysis.

   1. For example, if your new year starts 1 March 2024 and you have an age analysis as at 28 February 2024, your dates will be:

120+ Days: 31 Oct 2023

90 Days: 30 Nov 2023

60 Days: 31 Dec 2023

30 Days: 31 Jan 2024

Current: 28 Feb 2024

Total: N/A

2. Navigate to Main Menu > Suppliers > Supplier Invoices.

3. Click New (button).

4. Confirm the pop-up to create a new invoice (if applicable).

5. Type in the Date as calculated in Step 1 in the Date field.

6. Type in Opening Balance in the Reference & Note section.

7. Click Custom (button) next to Add.

8. Type Opening Balance under Description.

9. Select Opening Balance Control Account from the dropdown list under Account.

10. Select No VAT.

11. Enter the Supplier's Balance on the Supplier Age Analysis as the Amount.

12. Click Status (button) > Complete.

13. Repeat Steps 3-12 for every Supplier in the relevant period on the age analysis (i.e. Create one Invoice per period).

Option C Suppliers: Enter the Outstanding Transactions in Detail

1. Enter all the Outstanding Invoices (repeat these steps for every invoice):

   1. Navigate to Main Menu > Suppliers > Supplier Invoices.

   2. Click New (button).

   3. Type in the Date of the original invoice.

   4. Type in the original invoice number in the Reference & Note section.

   5. Click Custom (button) next to Add.

   6. Type Invoice under Description.

   7. Select Opening Balance Control Account from the dropdown list under Account.

   8. Select No VAT.

   9. Enter the Invoice Amount as the Amount.

   10. Click Status (button) > Complete.

2. Enter any Debit Notes (repeat these steps for every Debit Note):

   1. Navigate to Main Menu > Suppliers > Supplier Debit Notes.

   2. Click New (button).

   3. Type in the Date of the original debit note.

   4. Type in the original debit note number in the Reference & Note section.

   5. Click Custom (button) next to Add.

   6. Type Debit Note under Description.

   7. Select Opening Balance Control Account from the dropdown list under Account.

   8. Select No VAT.

   9. Enter the Debit Note Amount as the Amount.

   10. Click Status (button) > Complete.

3. Enter any Supplier Overpayments:

   1. Navigate to Main Menu > Accounting > Ledger.

   2. Click New (button): mouse over Supplier Transactions and click Supplier Payments.

   3. Enter the Date and Period as per the Bank Statement.  

   4. Select the Supplier next to Dr. Supplier.

   5. Select the Bank Account next to Cr. Bank. 

   6. Enter the amount paid next to Total (Inc) and select No VAT.

   7. Enter a Reference and Note in the sections provided.

   8. Click View (button) and select Items to show a list of outstanding items.

   9. Allocate the Payment to the applicable Invoices (see the Outstanding section on the bottom right):

      1. Click Allocate (button) to automatically allocate the payment.

      2. Click Select to choose the invoices that were paid by ticking the box next to the applicable invoices.

   10. Click Done (button).

   11. Keep a running total of the amount of Supplier Payments entered.

4. Transfer the Supplier Payments to the Opening Balance Control Account:

   1. Navigate to Main Menu > Accounting > Ledger.

   2. Click New (button) > General Income.

   3. Enter the Date and Period of the last day of the previous financial year.

   4. Select the same Bank Account you used in Step 3 next to Dr. Account.

   5. Set Cr. Account = Opening Balance Control Account.

   6. Enter the Amount (as calculated under Step 3.k) next to Total (Inc) and select No VAT.

   7. Enter Opening Balance Adjustment as the Reference.

   8. Click Done (button).

How to Perform a Quality Check

1. Display a Customer Age Analysis for the last day of the previous financial year (Main Menu > Accounting > Customer Age Analysis) and compare it to your old Customer Age Analysis.

   1. Check that every Customer's Balance agrees with the old Customer Age Analysis. 

2. Display a Supplier Age Analysis for the last day of the previous financial year (Main Menu > Accounting > Supplier Age Analysis) and compare it to your old Supplier Age Analysis.

   1. Check that every Supplier's Balance agrees with the old Supplier Age Analysis.

3. Display a Trial Balance for the last day of the previous financial year (Main Menu > Accounting > Trial Balance):

   1. Check that every account agrees with the old Trial Balance.

   2. Check that the Trial Balance is in balance.

   3. Check that the Opening Balance Control Account equals zero.

   4. Double-click the VAT Control Account and check that there are no transactions other than the opening balance.

   5. Clear any Trial Errors by fixing transactions.