Opening Balance Adjustments
Brandmagic
Member Posts: 2
My accountant has asked me to adjust opening balances for some of the following accounts after completing my year end accounts - where do I adjust for Retained Earnings and Accruals?
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Brandmagic
Member Posts: 2
My accountant has asked me to adjust opening balances for some of the following accounts after completing my year end accounts - where do I adjust for Retained Earnings and Accruals?
Comments
Hi, @Brandmagic.
Neither of those are accounts that appear by default in Wave. This is because Wave does not close years like other accounting software does.
Other accounting platforms don't allow you to touch historical data, but in Wave, you can pull up reports and make adjustments at any time. This means that your previous years never really "close". All that happens at year-end is that current year earnings get zeroed and added to previous year earnings.
At the start of your new fiscal year, you will see your new previous year earnings balance, fresh income and expense account balances, and your usual bank account balances.
What Wave doesn't do is put those amounts under a common account, such as retained earnings, that you can post transactions to. If you want your previous year income/loss to roll forward into retained earnings, you will need to manually do this through a journal transaction. You'll also need to create a Retained Earnings account on the Chart of Accounts.
I'll need a bit more information about what you mean by Accruals in this context to be best able to help. Is this meant to be for adjustments to your accounts receivable/payable, because your business does cash-based accounting? If that's the case, you'll find a workflow here.
Hi @Alexia, first of all thanks for taking the time to leave such a detailed response - I think you may have given me enough to allow me to move forward. Watch this space!
Thanks again.
Happy to help! Reach out if you need anything more!