Opening balances that tie the first time
Every opening figure has one place it belongs. Put it there, watch the trial balance beside it, and start the year with books an accountant will sign.
Opening balances are the position of the business on the day E-Khata Cloud becomes the system of record: what customers owe you, what you owe suppliers, what stock is on the shelf and what it is worth, how much cash and bank you hold, and what you owe lenders and owners. Each has its own entry point, and the Opening Balances screen shows the trial balance beside the figures so you can see the moment it ties.
The five kinds of opening balance
Party balances are what each customer owes you and what you owe each supplier. Stock is the quantity of each product in each warehouse and its value. Cash and bank are the balances in the drawer and each account. Liabilities are loans and what you owe that is not a supplier. Capital is what the owners have put in, which is the figure that makes everything else balance.
Party balances: on the party, not in a journal
Enter a customer's or supplier's opening balance on the party itself, either in the parties import or on the party form. E-Khata posts it as an opening entry to that party's ledger and to receivables or payables in total. Never post party balances as a manual journal; they would then be in the accounts but not on the party's ledger, and the aging report would not see them.
- Customers: what they owe you, as a positive balance.
- Suppliers: what you owe them.
- The totals appear on the Opening Balances screen automatically.
Stock: quantity on the product, value on the screen
Opening quantities go in with the products import, per product and per warehouse, or on an opening stock receipt for batches with expiry dates. The value of that stock, at cost, is the figure entered against the inventory account on the Opening Balances screen. If your costing method is FIFO or weighted average, the opening quantities carry the cost you enter as their first layer.
Cash, bank, loans and owners
Cash in hand and each bank account are entered on the Opening Balances screen against their own accounts. Loans are entered on the Loans screen, which posts the opening liability. Owner capital is the last figure: enter it so the trial balance ties, or let the screen show you the difference and confirm it as capital.
Reading the trial balance
The trial balance lists every account with its debit or credit. When the two totals are equal, the opening position ties. When they are not, the difference is the amount still missing or entered on the wrong side. The most common mistakes are stock value entered but quantities not, a bank overdraft entered as a positive balance, and a supplier balance entered as a customer.
Once it ties, lock the period before the cut-over date so nothing can be posted into history by accident.
