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Hi, nice to meet you guys, and thanks in advance for any help you can provide... I've been trying to fix this issue for a couple of weeks now, your help would be very appreciated!
1. I set up a new company in SImply Accounting (Pro 2009).
2. The company has been in business for several years but we have only started entering data in Simply Accounting as of 2011, so there are opening balances for several asset and liability accounts, which have been duly entered in their opening balance field, all of which either debited or credited GL 3560 Previous Year's Retained Earnings. Any transactions in 2011 that pertain to the previous year were also applied against GL 3560 (not my choice, the system created and applied the entries to GL 3560 automatically).
3. I am now trying to update the Previous Year's Retained Earnings GL 3560 to match the previous year's balance sheet, however every time I try to update the opening balance to reflect the previous year's balance sheet the system makes an automatic adjustment to GL 3560, effectively cancelling out the opening balance I have entered.
For example, let's say Previous Year's Retained Earnings GL 3560 balance is $80000, but the actual opening balance should be $150000. I then enter the correct opening balance of $150000, save and close the Edit Account tab. The system makes an automatic adjustment of $70000 to GL 3560, returning my opening balance back to $80000. So frustrating!
How do I enter the correct opening balance to GL 3560 so the system reflects the previous year's balance sheet?
Thank you so much!
This is the message I get every time I try to adjust and balance Retained Earnings - Previous Year in the "Edit Accounts" tab:
"IN ORDER TO BALANCE YOUR ACCOUNTS A DEBIT OF $99999.99 HAS BEEN ADDED TO RETAINED EARNINGS - PREVIOUS YEAR"
But this is the very account I'm trying to balance. Please help!
(ps. i changed the amount to $99999.99 for confidentiality reasons)
Under Setup, Settings, General, Linked Accounts you have the option to Record Opening Balances in my Retained Earnings Account checked off. So each time you change the opening balance of an account it automatically balances it up by posting the difference to the R/E account.
But what you are really trying to do is balance the Debits and Credits of the file. If your Retained Earnings account is wrong, there must be another account or several accounts wrong as well. Figure out which account(s) that is and edit the balance of that account. When you save, the difference will be automatically sent to the Retained Earnings account, balancing it to actual as well.
Hello Richard, Thank you for your response.
Yes, I'm aware that there's an option for opening balances to be recorded in the retained earnings account (or not). This was checked off so that opening balances are recorded in the retained earnings - previous year account, which is the generally accepted procedure.
I should be able to then adjust the opening balance for Retained Earning's - Previous Year so that it matches the balance sheet, but when I adjust the opening balance to match the balance sheet the system then adjusts the opening balance again and throws off the numbers. Even if I enter a $0 opening balance, the system reverses my adjustment back to (in this case) $43000 opening balance.
It's definitely a glitch with the software, my numbers (and entries) are solid. I should at the very least be able to adjust the opening balance to zero $0 without the system adjusting the opening balance back up to $43000. It is as if, once opening balances or entries for any other accounts have been coded to the Retained Earning's Previous Year account, you can't adjust the opening balance for the Retained Earnings - Previous Year account itself.
Is there a workaround for this?
Ah. I just figured it out. Thanks!
We are not going to get into a QB vs Simply debate as I have seen many more serious issues in both programs.
Think about it this way. You have the rule Debits = Credits.
You have an account 1100 Bank that the opening balance was $100. So you put it in the opening balance box. Therefore you have increased the debits by $100.
You have already acknowledged that you have got the program set to automatically update any imbalance in the debits vs. credits to the account 3560 Retained Earnings - Last Year.
So if you do not put in the Credit side, you will end up with $100 credit in the Retained Earnings account.
Now let's say that Retained Earnings account is really supposed to be $500. You wish to add $400 to it by going to the Opening Balance box for that account and changing it from $100 to $500. Now that is a difference of $400.
Hopefully you are with me so far. You will have a $100 Debit in the bank and $500 Credit in the Retained Earnings account.
You close the window and the program attempts to balance the Debits and Credits by adjusting the Retained Earnings Account automatically. Because you are missing a $400 debit, the program automatically adjusts the Retained Earnings account by a $400 debit.
What is the balance of the Retained Earnings account now? $100, the same as the bank account.
This is not a software issue, it is a math and settings issue. If you did not have the program automatically adjust Retained Earnings (which is the reason I pointed you in the direction of where the setting was), you would be asked to send it to an account of your choosing.
If you balanced it yourself by adding the correct amount to the correct account, the program would not need to balance it for you.
Debits still have to equal credits. You are making an adjustment on one side but not the other. Some other account is out of balance but you are not sending the money to the correct account, you are letting the program send it to the Retained Earnings account. Maybe it belongs in the Shareholder account, maybe a capital asset account. You need to review all the accounts on the original documentation against what you have in the opening balances to see where you are missing money.
Hope this explains it better.
Thanks Richard. I eventually found a workaround to balance the books. And I agree, I have found serious issues with both QB and Sage, and ACCPAC, JDEdwards, you name it, there are significant flaws in the code (in my experience).
It's frustrating as all get-go. But obviously a clear indication that there is a market out there for solid accounting software without all the glitches. I for one will be first in line to buy said software if it is ever developed.
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