A basic opening balances help article for getting up and running can be found here.
What are Opening Balances?
If your business used a previous accounting system before Farmplan Business Cloud, you will need to enter your Closing Balances from this previous system as Opening Balances on Farmplan Business Cloud. These balances will be things like the value of assets, bank balances, loan balances etc. plus any outstanding invoices.
If you are setting up part way through a financial year you will be able to enter all the to-date trading figures from your previous system.
Before setting up Opening Balances it is important to ensure that the bookkeeping completed on your previous system was correct and complete up to date.
Don’t worry if you do not have all the figures to hand immediately; you can get started without them, but we recommend that you enter any outstanding invoices as soon as possible so they are available for payment.
What date should I start using Farmplan Business Cloud?
Where your financial year starts on the same day as a new VAT period:
This new financial year start date is the best date to start with.
Process is as follows:
VAT return from the last completed VAT period in the old year should be submitted using your previous system
Accounts from the completed Financial Year End should be finalised in the previous system. However, don't worry if they are not yet available. You can start entering the new year's data without them.
Finalised Balance Sheet should be used to set up the opening balances in Farmplan Business Cloud
Make sure you enter your finished year end date as your opening balances date in the Opening Balances Wizard. E.g. If your business year end is 31 December then this is the date you should enter in the Opening Balances Wizard.
New transactions should be entered from the first day of the new financial year. In the example above this would be 01/01/2020.
Where your financial year starts on a different day to a new VAT period:
The new VAT period date is the best date to start with.
Process is as follows:
VAT return from the completed VAT period should be submitted from the previous system
Accounts for the overlapping Financial Year End will be prepared from Farmplan Business Cloud but the detail of the transactions will be split across the two systems, so records from both systems will need to be available for your accountant.
The Trial Balance figures from the incomplete year in the old software should be used to set up the Opening Balances in Farmplan Business Cloud. Use the date of last day of the previous VAT period to enter your year to date figures. This will include balances from all the income and expense codes for the part completed year. (Do not use your Balance Sheet as this will not include your trading figures for the year to date.)
Make sure you use the date of last day of the previous VAT period as your opening balances date in the Opening Balances Wizard. E.g. If you have just completed your VAT return to 31 October then this is the date you should enter in the Opening Balances Wizard.
New transactions should be entered from the first day of the new VAT period. In the example above this would be 01/11/2020.
While you can begin using Farmplan Business Cloud on any date, using the suggested start dates above will ensure your VAT returns can be submitted digitally according to the rules of MTD and your financial records are not unnecessarily split across two years.
It is worth noting that the business can change its VAT period to coincide with its financial year. This can be done very easily through the business’ HMRC online VAT Account.
How to enter Opening Balances
To enter Opening Balances in Farmplan Business Cloud, go to Accounting > Opening Balances. You will then be presented with the Opening Balance Wizard, pictured below.
Date
Enter the date of the closing balances of your previous system i.e. the date that you stopped using your old system. These will become your opening balances in Farmplan Business Cloud.
This may be the last date of the previous financial year if you are starting at the beginning of this financial year but may be any date if you started part way through the year.
For example, if you are starting to record your accounts from 01 January, enter the balances as they were on 31 December. By using the date of the day before your start date you will be able to report on the correct date ranges.
NOTE - do not enter any transactions or import invoices/bank feeds using the Enter Transactions option on any date prior to this date. All entries before this date should already be reflected in your opening balances.
Customers/Suppliers
The next two tabs allow you to add customers and suppliers to Farmplan Business Cloud (if you haven't done so already). At this point you only need to add the suppliers and customers who you owe money to (creditors) and who owe money to you (debtors) at the time of switching from your old bookkeeping system.
NB If you have lots of customers/suppliers to add, you can import them all in one go from a file by using the import button on this screen or by heading to the Customers Tab/Suppliers Tab.
Otherwise new customers/suppliers can be added as you need them in the as you enter new invoices.
If your business is VAT registered then you will need to supply your VAT details. You may have already entered this information when setting up Farmplan Business Cloud originally but if not, you will need to enter it now – Company Settings > Financial. It is important to get the VAT settings right at this stage so that Farmplan Business Cloud knows how to calculate the VAT correctly on the Opening Balance Transactions, such as in the amounts owed to your suppliers.
NB most businesses using Farmplan Business Cloud will be on an Invoice Based scheme. If you are not sure which scheme you are on you should check with your accountant or HMRC.
Outstanding Invoices
These are the invoices that are already outstanding on the first date of entry.
They can be entered manually or imported from a csv file (you will need to ensure you have created all required Suppliers and Customers before importing). If you are manually entering the invoices into opening balances, you can use the date on the invoice or if this is not known you can use the day before the first date of entry in Farmplan Business Cloud i.e. the closing date of your previous system.
If you were neither owed money from customers nor owed money to suppliers on this date, you can skip this stage.
All unpaid invoices should be entered here.
Type - You can enter both customer and supplier invoices here by changing the 'Type' of transaction on each row
Account - this is the supplier or customer name. Pick from the drop down list or add a new one
Inv.Ref - this is the invoice reference and is mandatory
Enter the net value and check the VAT calculated. It can be edited if necessary - take care if it is zero rated as you will need to change the VAT to 0. Alternatively enter the gross value and the net and VAT will be calculated.
To add another invoice just click on the + sign.
If you are importing invoices from a CSV, click the 'Import Customer Invoices' or 'Import Supplier Invoices' button at the bottom. You will be presented with the following screen from which you can browse to your file, ensuring it has the required headings as stated.
Note - you can only import single line invoices. If your file has outstanding invoices with multiple lines then the file will need to be adjusted to be one line for the total amount of each line of the invoice.
If you are using the Invoice Based VAT scheme the VAT will already have been taken care of in your previous bookkeeping system but if you are using the Cash Based Scheme the VAT will be accounted for when the outstanding invoices are paid. Farmplan Business Cloud will automatically take care of this. You just need to enter the Net and VAT as they appear on the invoices.
Enter Opening Balances
The final step asks for the remainder of your Opening Balances from your previous system. These can be taken from the Balance Sheet if you are starting at the beginning of a new financial year or the Trial Balance if you are starting part way through a financial year.
You will notice that the Amount owed from customers and Amount owed to suppliers will have been populated for you. These amounts should match those on your previous system’s accounting balances - if they don't match you will need to go back to the previous step and correct the invoicing entries.
All other opening balances should be typed in as they appear on the closing records from your previous system.
TIP- if you are looking for a specific code use the command CTRL F and use the find search box to highlight it.
Opening Balances can sometimes get complex depending on your previous system and how many balances you have. Therefore, if you have any doubts it's always best to ask your accountant.
Save Draft
Remember that the total Credits should equal the total Debits but do not worry if you cannot finish this in one go; just save your balances by using the ‘Save Draft’ button at the bottom of the screen.
Finish
When the opening Trial Balance is complete click on Finish to see a summary of the balances you have entered including outstanding invoices. They will now be reflected in reports.
Amending Opening Balances
It is possible to amend your Opening Balances but the procedure will delete all existing opening category balances from current reports except those relating to outstanding invoices.
If you need to unlock the Opening Balances, click on the orange button at the top of the screen.
Don’t worry – your opening balances are just being removed from other reports e.g. in Categories or on the Trial Balance. They are still present in this screen and will populate all the relevant reports once you finalise this screen again.