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Chapter 5

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Launching a bank account

Launching a bank account in QuickBooks is quite simple, once you understand a few complicating factors.  The process is really similar to a reconciliation.  The first critical task is to state your beginning bank balance correctly, XE "beginning bank balance"  XE "balance:bank, opening"  XE "opening balance:bank" ,  which means we must know the lay of the land.  Accounts in QuickBooks all start out as an empty framework.  Money amounts come into the accounts as transactions and only as transactions.  That includes the beginning balance.  It may be shown as Beginning Balance, but functionally, it is just one more transaction.  The next question is, where are you coming from?

If you reconcile your bank statements, lets begin with the last one that you have reconciled.  The statement shows an ending balance, which can go right into the QuickBooks bank account register, but with a different date.

As the beginning balance, you want that figure to appear at the top of the register, and here is the catch.  All registers in QuickBooks always and invariably display transactions in order by date (and with some defined sequences within one date.)  For the opening balance to be at the top, it must have the earliest date.  We may have to tell a constructive white lie, or perhaps adjust our viewpoint on the date connected with that balance.

Looking at your check register, you may find checks in transit or perhaps a deposit not yet recorded.  Assuming that you found some prior transactions, the statement balance was effectively the balance before any of them occurred.  Therefore, in the QuickBooks bank account, the best date for the beginning balance is the day before the earliest other transaction. Before actually entering the balance, we must take care of some other details.

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Last modified: May 21, 2004