Opening Balances are calculated and maintained differently by Big Red Cloud depending on whether Allocations is On or Off in the accounting software.
When Allocations is Off, the opening balance is calculated at year end and the previous year’s transactions are deleted. This is the ‘Balance Brought Forward’ method.
With Allocations On, Customer’s and Supplier’s Opening Balances are calculated from the outstanding balances of all transactions. Transactions are not deleted at Year End and a new Opening Balance is not created.
When starting to use Big Red Cloud and setting up the opening balances for the first time you must enter the details of each unpaid or part-paid invoice so that receipts can be properly allocated against them.
Once an initial Year End Routine has been run on a company Open Balances cannot be entered directly as they are made up of the invoices, receipts/payments and journals entered in previous years. If an adjustment to an Opening Balance is required a debtors or creditors journal entry must be entered.