Accounting Take-On Balances - Setup Tutorials

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):

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

   • 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 Customer Balances.

   • 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.

   • 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.

   • 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 Supplier Balances.

   • 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. 

   • 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.

   • 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:

   1. 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.

      • Note: You can also enter the previous year's Statement-of-Profit-or-Loss monthly totals as a Budget (instead of entering take-on balances), to compare the change from the previous to the current year.

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

   3. Customer Age Analysis.

   4. Supplier Age Analysis.

2. Choose a take-on method for Customers.

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

3. Choose a take-on method for Suppliers.

   2. • 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 > Accounts (tab).

2. Click Add Account (button).

3. Add an Account as follows:

   1. Type in Name = Opening Balance Control

   2. Code = Leave Blank

   3. Set Category = Current Liabilities

   4. Default = Leave Blank

   5. Currency = Leave Blank

   6. Import = Leave Blank

4. Click Save (button)

   2. • Note: The Category is unimportant because, by the end of this tutorial, the account should have a zero balance. 

How to Create Accounts for Fixed Assets

1. Navigate to Main Menu > Setup > Accounting > Accounts (tab).

2. Click Add Account (button) and add an account as follows:

   1. Type in Name = Name of the fixed asset (e.g. Office Furniture)

   2. Code = Leave Blank

   3. Set Category = Non-current Assets

   4. Default = Leave Blank

   5. Currency = Leave Blank

   6. Import = Leave Blank

3. Click Add Account (button) and add an account as follows:

   1. Type in Name = Name of the fixed asset Cost (e.g. Office Furniture Cost)

   2. Code = Leave Blank

   3. Set Category = Non-current Assets

   4. Default = Leave Blank

   5. Currency = Leave Blank

   6. Import = Leave Blank

   7. Right-click the account and select Nest Under: select the main account name (e.g. Office Furniture)

4. Click Add Account (button) and add an account as follows:

   1. Type in Name = Name of the fixed asset Cost (e.g. Office Furniture Accumulated Depreciation)

   2. Code = Leave Blank

   3. Set Category = Non-current Assets

   4. Default = Leave Blank

   5. Currency = Leave Blank

   6. Import = Leave Blank

   7. Right-click the account and select Nest Under: select the main account name (e.g. Office Furniture)

5. Repeat Steps 2-4 for all your Fixed Assets.

6. Click Save (button).

Example: 

Office Furniture > Office Furniture Cost

                 > Office Furniture Accumulated Depreciation

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 oe period as the Date and Period.

4. Type Opening Balance in the Reference field.

5. Leave the Amount as zero and fill in the details below the line:

6. Click Add Item (button): 

   1. Type in Description = Opening Balance (overtype Default).

   2. If the next entry on the Trial Balance has a Debit Balance:

      • Set Debit = Account for Trial Balance Entry.

      • Set Credit = Opening Balance Control Account.

      • Set VAT = No VAT.

      • Type in the Amount from the Trial Balance.

   3. If the next entry on the Trial Balance has a Credit Balance:

      • Set Debit = Opening Balance Control Account.

      • Set Credit = Account for Trial Balance Entry.

      • Set VAT = No VAT.

      • Type in the Amount from the Trial Balance.

7. Enter the VAT Control Entry as follows:

   1. Set Debit = (leave blank).

   2. Set Credit = VAT Control.

   3. Set VAT = VAT Only.

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

   5. Click Add Item (button):

      • Set Debit = Opening Balance Control.

      • Set Credit = (leave blank).

   6. Type in the Amount for the VAT Control (The amount from Step 7.4).

      • 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.

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

   2. • 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. 

9. Click Done (button).

Entering Fixed Assets

Option A: How to Enter Fixed Assets in Total

ℹ️ 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.

For example, afterwards, your Computer Equipment Account will show:

▶ Opening Balance R50 000. 

1. Create accounts for the Fixed Assets (see above). 

2. Enter the Transactions:

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

   2. Click New (button) > General Journal.

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

   4. Type Opening Balance in the Reference field.

   5. Leave the Amount as zero.

   6. Below the line:

      1. Type in Description = Opening Balance (overtype Default).

      2. Set Debit = Cost Account of a Fixed Asset (e.g. Office Equipment Cost).

      3. Set Credit = Opening Balance Control.

      4. Set VAT = No VAT.

      5. Type in the Amount from the Trial Balance.

      6. Click Add Item (button).

      7. Type in Description = Opening Balance (overtype Default).

      8. Set Debit = Opening Balance Control.

      9. Set Credit = Accumulated Depreciation of the Fixed Asset entered line 2 (e.g. Office Equipment Accumulated Depreciation).

      10. Set VAT = No VAT.

      11. Type in the Amount from the Trial Balance.

   7. Click Done (button).

3. Repeat Step 2 for all the Fixed Assets.

Option B: How to Enter Fixed Assets in Detail

ℹ️ 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. 

For example, 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 the Main Menu > Accounting > Ledger.

   2. Click New (button) > General Journal.

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

   4. Type Opening Balance in the Reference field.

   5. Leave the Amount as zero.

   6. Below the line:

      1. Type in Description (overtype Default) = Opening Balance: Description of Asset (e.g. Opening Balance: HP Laptop X23 R16 000 (purchased 12 Jan. 2024). 

      2. Set Debit = Cost Account of a Fixed Asset (e.g. Office Equipment Cost).

      3. Set Credit = Opening Balance Control.

      4. Set VAT = No VAT.

      5. Type in the Amount from the Trial Balance.

      6. Click Add Item (button).

      7. Type in Description = Opening Balance (overtype Default).

      8. Set Debit = Opening Balance Control.

      9. Set Credit = Accumulated Depreciation of the Fixed Asset entered line 2 (e.g. Office Equipment Accumulated Depreciation).

      10. Set VAT = No VAT.

      11. Type in the Amount from the Trial Balance.

   7. Click Done (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 > Workflow > Customer Invoices.

2. Click New (button).

3. Type in the last day of the previous financial year in the Date field and the Period 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. Select the Customer from the dropdown list next to Customer.

5. Type in Opening Balance in the Reference and Note sections.

6. Click Custom (button) next to Add.

7. Type Opening Balance under Description.

8. Click Menu (button) > Enable Debit and Credit.

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

10. Select No VAT.

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

12. Click Status (button) > Complete.

13. Click Save (button).

14. Repeat Steps 2-13 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 > Workflow > Customer Invoices.

3. Click New (button).

4. Type in the Date as calculated in Step 1 in the Date field and the Period field.

5. Select the Customer from the dropdown list next to Customer.

6. Type in Opening Balance in the Reference and Note sections.

7. Click Custom (button) next to Add.

8. Type Opening Balance under Description.

9. Click Menu (button) > Enable Debit and Credit.

10. Select Opening Balance Control Account from the dropdown list under Credit.

11. Select No VAT.

12. Enter the Customer's Amount due for that date on the Customer Age Analysis as the Amount.

13. Click Status (button) > Complete.

14. Click Save (button).

15. Repeat Steps 3-14 for every customer in the relevant period on the age analysis (i.e. each amount on the age analysis will have an invoice).

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 > Workflow > Customer Invoices.

   2. Click New (button).

   3. Type in the Date of the original invoice.

   4. Select the Customer from the dropdown list next to Customer.

   5. Type in the invoice number in the Reference and Note sections.

   6. Click Custom (button) next to Add.

   7. Type the Invoice under Description.

   8. Click Menu (button) > Enable Debit and Credit.

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

   10. Select No VAT.

   11. Enter the Invoice Amount as the Amount.

   12. Click Status (button) > Complete.

   13. Click Save (button).

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

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

   2. Click New (button).

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

   4. Type in the original Credit Note Number in the Reference and Note sections.

   5. Click Custom (button) next to Add.

   6. Type Credit Note under Description.

   7. Click Menu (button) > Enable Debit and Credit.

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

      1. • Note: If the account is not one of the columns use the Field Chooser (*) and tick Debit to add it.

   9. Select No VAT.

   10. Enter the Credit Note Amount as a Fixed Price.

       1. • Note: If the Fixed Price is not one of the columns, use the Field Chooser (*) and tick Fixed Price to add it.

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

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

       2. Click Select (button) in the Outstanding section.

       3. Tick the applicable Customer Invoice.

       4. Click Allocate (button).

       5. Click Done (button).

3. Enter any Customer Receipts (repeat this step for every customer receipt):

   1. Navigate to Main Menu > Accounting > Ledger.

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

   3. Enter the Date and Period as per the original receipt.  

   4. Select the Customer next to Customer.

   5. Select a Bank Account next to Bank. 

   6. Enter the Amount paid and select No VAT.

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

   8. Click Save (button).

   9. In the bottom-right Outstanding section:

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

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

   10. Change the Status (on the Status bar) to Complete.

   11. Click Save (button).

   12. 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) > Expenses.

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

   4. Set Expenses (Dr) = Opening Balance Control Account.

   5. Select the same Bank Account you used in Step 3.5 next to Bank (Cr).

   6. Enter the Amount (as calculated under Step 3.12) next to Total (Inc) and select No VAT.

   7. Enter Opening Balance Adjustment as the Reference.

   8. Change the Status (on the Status bar) to Complete.

   9. Click Save (button).

Entering Supplier Opening Balances

Option A Suppliers: Only Enter the Total Outstanding Amount

1. Navigate to Main Menu > Accounting > Supplier Invoices (EXP).

2. Click New (button).

3. Type in the last day of the previous year in the Date and Period fields.

   • 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 and Note sections.

5. Select the Supplier Account from the dropdown list next to Supplier.

6. Click Custom (button) next to Add.

7. Type Opening Balance under Description.

8. Click Menu (button) > Enable Debit and Credit.

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

10. Select No VAT.

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

    • You can enter it as a Fixed Price or as a Unit Cost with a Qty of 1.

12. Change the Status on the Status Bar to Complete.

13. Click Save (button).

14. Repeat Steps 2-13 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.

   • 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 > Accounting > Supplier Invoices (EXP).

3. Click New (button).

4. Type in the Date as calculated in Step 1 in the Date and Period fields.

5. Type in Opening Balance in the Reference and Note sections.

6. Select the Supplier Account from the dropdown list next to Supplier.

7. Click Custom (button) next to Add.

8. Type Opening Balance under Description.

9. Click Menu (button) > Enable Debit and Credit.

10. Select Opening Balance Control from the dropdown list under Debit.

11. Select No VAT.

12. Enter the Supplier's Amount due at the specific date as the Amount.

    • You can enter it as a Fixed Price or as a Unit Cost with a Qty of 1.

13. Change the Status on the Status Bar to Complete.

14. Click Save (button).

15. Repeat Steps 2-13 for every Supplier in the relevant period on the age analysis (i.e. each amount on the age analysis will have an invoice).

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 > Accounting > Supplier Invoices (EXP).

   2. Click New (button).

   3. Type in the Date of the original invoice in the Date and Period fields.

   4. Type in the original invoice number in the Reference and Note sections.

   5. Select the Supplier Account from the dropdown list next to Supplier.

   6. Click Custom (button) next to Add.

   7. Type Opening Balance under Description.

   8. Click Menu (button) > Enable Debit and Credit.

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

   10. Select No VAT.

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

       • You can enter it as a Fixed Price or as a Unit Cost with a Qty of 1.

   12. Change the Status on the Status Bar to Complete.

   13. Click Save (button).

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

   1. Navigate to Main Menu > Accounting > Supplier Debit Notes (EXP).

   2. Click New (button).

   3. Type in the Date of the original debit note in the Date and Period fields.

   4. Type in the original debit note number in the Reference and Note sections.

   5. Select the Supplier Account from the dropdown list next to Supplier.

   6. Click Custom (button) next to Add.

   7. Type Opening Balance under Description.

   8. Click Menu (button) > Enable Debit and Credit.

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

      • Note: If there is not a Credit column, use the Field Chooser (*) and select Credit to add it.

   10. Select No VAT.

   11. Enter the Debit Note Amount as the Amount.

       • You can enter it as a Fixed Price or as a Unit Cost with a Qty of 1.

   12. Click Save (button).

   13. Click Menu (button) > Open Transaction in Ledger.

   14. Change the Status on the Status Bar to Active.

   15. In the bottom-right Outstanding section: 

       • Click Allocate (button) to automatically allocate the debit note, or

       • Click Select (button) to choose the invoices that were paid by ticking the block next to the applicable invoices.

   16. Change the Status on the Status Bar to Complete.

   17. Click Save (button).

3. Enter any Supplier Overpayments:

   1. Navigate to Main Menu > Accounting > Ledger.

   2. Click the arrow next to the New (button): mouse over Supplier Transactions and click Supplier Payments.

   3. Enter the Date and Period of the original payment. 

   4. Select the Supplier from the dropdown list next to Supplier.

   5. Select a Bank Account next to Bank. 

   6. Enter the amount paid in the Amount field and select No VAT.

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

   8. Click Save (button)

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

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

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

      • Click Done (button).

   10. 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) > Other Income.

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

   4. Enter Opening Balance Adjustment as the Reference.

   5. Click Add Item (button).

   6. Click Menu (button) > Enable Debit & Credit.

   7. Select the same Bank Account you used in Step 3 next to Bank (Dr).

   8. Set Other Income (Cr) = Opening Balance Control Account.

   9. Enter the Amount (as calculated under Step 3.10) in the Amount field and select No VAT.

   10. 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 Ageing) 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 Ageing) 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 > Financials > Menu (button) > 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 the transactions.