The Opening Balance

The Opening Balance

If this is your first time using Membership Toolkit's Accounting Tools, you will need to include a starting balance for your accounts.  Here is an example:
You have:
  1. opening checking balance of $4,200
  2. outstanding check to Minnie Mouse for programs written on June 22nd for $150.
  3. outstanding check to Donald Duck from communications written on May 18th for $50.
To set up your accounts you need to do the following:
  1. Create a starting balance for your checking account.
  2. Create a starting balance for your carryover.
  3. Enter the outstanding checks.

Step 1 - Create a Starting Balance for Your Checking Account
The starting balance for your checking account will be the amount in carryover plus any checks that have yet to clear your account.  In our scenario, the starting balance will be $4,000 + $150 + $50 = $4,200. This matches the closing balance of our checking account.
  1. Go to Accounting / Accounts tab.
  2. Select "enter an opening balance."
  3. Choose the proper account. (your checking account)
  4. Set the date as the first day of your fiscal year
  5. Enter $4,200 for your starting balance.

Step 2 - Create a Starting Balance for Your Carryover Income Line
Most non-profit organizations choose to show their income that is rolled over from the previous year in their budget. This balances the opening balance for your checking account and any other asset accounts that you may have.  The carryover is the amount of funds available to your organization to spend. It is the ending balance of the checking & savings accounts minus any checks that have not cleared.
  1. Go to Accounting / Accounts tab.
  2. Select "enter an opening balance."
  3. Choose the proper account (Income - Carryover)
  4. Enter $4,000 for your starting balance

Step 3 - Record Checks that Have Not Yet Cleared
You will need to "write checks" for the two amounts that have yet to clear your account.  
  1. Go to Accounting / Summary tab.
  2. Select "write a check" for your checking account.
  3. Enter information regarding the check that is outstanding.
  4. Choose the date and financial category associated with the outstanding check.

Once you have completed all of these entries, your Checking Account Balance should be $4,000 and the carry-over (income line item) should be $4,000. Because the checks were written prior to your current year, they will not show up in your budget reports for this year.

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