Opening balances

If you've been trading for a while before you start using FreeAgent, then you'll have some opening balances to put into FreeAgent when you first begin using it.

These are the figures as at the date you've set as your FreeAgent start date.

If your business is new, you'll have no opening balances to enter.

What your opening balances might include

• Money your customers owed you, which in accountantese is called "Trade debtors".
• Money you owed to your suppliers, which is also called "Trade creditors".
• The balance(s) on your bank account(s).
• Money you owed to HM Revenue for PAYE and NIC, or VAT.

The list goes on.

Where to enter your opening balances

FreeAgent has a handy Opening Balance Builder to help you record all these figures.

To find it, from the Accounting menu, choose Reports, then Trial Balance.

Filter the date menu to choose "Opening Trial Balance Builder".

The Opening Balances screen appears.

To enter each balance, click the New Opening Balance button.

Enter the code for the balance you want to enter.

I'm going to put in £500 that my customers owed me when I began using FreeAgent.

So I would choose code 681, Trade Debtors.

And because my customers owed me money, that's a debit, so I'll put in just 500.00.

If I were entering money that my business owed to someone else, a credit, I'd enter the figure as a minus.

Create that new balance.

You can see that FreeAgent has now put in the new balance.

It's also put in an equal and opposite entry to the suspense account, to make sure that the trial balance always balances.

When your suspense account shows as £nil, you know you've put all your opening balances in.

What if I enter an incorrect opening balance?

Don't worry, you can easily edit your opening balance.

Just click on the wrong balance and change it.

So if I discover that my customers actually owed me £600 at my FreeAgent start date, I can just click on the entry for Trade Debtors...

...and overtype the £500 with £600.

Once I've saved the change, the revised figure appears on the opening trial balance.