Overview:

A supplier opening balance is the amount recorded in a company’s accounts payable ledger for a supplier at the start of a new accounting period. This balance reflects the total amount owed to the supplier based on transactions that occurred in the previous period, such as unpaid invoices or outstanding credits.

When transitioning to a new accounting period or system, accurately entering the supplier opening balance ensures that all previous obligations are correctly carried over. This balance is crucial for maintaining accurate financial records, managing cash flow, and ensuring that the company’s accounts payable are properly tracked and reconciled.

You can either enter your supplier balances by posting the outstanding purchase invoices to the ledger or by entering your supplier opening balances. If you use the VAT Cash Accounting scheme and a supplier has more than one outstanding transaction, you must add each of these transactions separately. Entering the transactions separately or posting the purchase invoices to the ledger will be particularly useful if you want to use ageing to work out when to make a supplier payment. 

If you plan to use the Standard VAT accounting scheme and you do not wish to use ageing with your transactions, then you can enter the total amount owed to a supplier as a lump sum.

Should you find that your Creditors figure does not match the figure in your previous accounting application you can clear the opening balance with a journal entry. Then you can either enter a new journal to enter the correct Creditors value or if you prefer you can enter your opening balances directly to the nominal account using the “Opening Balances” option.

Enter Your Supplier Opening Balance

To enter your Customer Opening Balances do the following:

1. 1. Navigate to the Setup tab, 
   2. Select Supplier Opening Balance  
   3. Select the Account Name you wish to update
   4. Enter the required details and hit Save to create your Supplier Opening Balance.
   5. Repeat the process for every supplier you wish to update

Learn more about managing supplier data in Zumzum Financials.