Opening Balance Entries: Starting Your Books with the Right Numbers
How to give your DynaTax AI books a correct starting point — whether you are setting a single account's opening balance from the Chart of Accounts, or migrating a full set of balances from another bookkeeping system with a journal entry.
What Is an Opening Balance?
An opening balance is the amount an account holds on the day you start keeping books in DynaTax AI. If your business checking account already has $8,500 in it when you begin, your general ledger needs to reflect that — otherwise reports start from $0 and every balance after that is wrong by the same amount.
You need opening balances when:
- Your bank account, credit card, or loan had a balance before you started tracking it here
- You are switching from another bookkeeping system mid-year and need your books to pick up where the old ones left off
- You are adding a new account to your chart of accounts that already carries a real-world balance
Setting an Opening Balance on a New Account
The simplest case: you are creating a GL account and it already has a balance. The Add Account form takes the opening balance directly.
- Go to Accounting → Chart of Accounts and click Add Account.
- Choose the Account Type (Asset, Liability, Equity, Revenue, or Expense) and a matching Account Category.
- Fill in the 4-digit Account Code and the Account Name (for example Cash in Bank).
- Enter the starting amount in the Opening Balance field. It defaults to 0, so you can leave it empty for accounts that start from nothing.
- Save the account.
How the Journal Entry Works
Opening balances follow standard double-entry bookkeeping: every debit needs an equal credit. When you bring in a bank balance, the offsetting side goes to equity. A typical entry for an $8,500 checking balance looks like this:
Example journal entry
Debits must equal credits (balanced entry)
The direction flips for accounts you owe on:
- Credit cards: debit Opening Balance Equity, credit the credit-card liability account
- Loans: debit Opening Balance Equity, credit the loan payable account
"Opening Balance Equity" is a temporary holding account. During year-end closing or financial statement preparation, your accountant reclassifies it to Owner's Equity, Retained Earnings, or the appropriate equity account for your business structure.
Migrating Full Balances from Another System
When you are moving from another bookkeeping system, record all opening balances in one manual journal entry instead of typing a balance into each account. Pull a trial balance (or balance sheet) from the old system as of your last day there, then:
Create the accounts
In Accounting → Chart of Accounts, make sure every account on the old trial balance exists here. Leave the Opening Balance field at 0 — the journal entry will carry the amounts.
Open a new journal entry
Go to Accounting → Journal Entries and create a new entry. Date it the day before your start date— if your books begin July 1, date the entry June 30. That keeps the opening balances out of your first month's activity reports.
Enter one line per account
Debit each asset to its balance; credit each liability and equity balance. Copy the amounts straight off the old system's trial balance. If the entry does not balance on its own, the difference goes to your Opening Balance Equity account.
Save as draft, review, then post
You can Save as Draft to review before it touches the ledger, or Save & Post directly. Only posted entries affect account balances and reports.
Verify against the old system
Run a balance sheet as of your start date and compare it line by line with the old system's closing balance sheet. They should match exactly.
Reconciliation Beginning Balance Is a Separate Thing
People often mix these up. The opening balances above live in your general ledger. A bank reconciliation has its own beginning balance — the starting point of one bank statement — and DynaTax AI manages it for you:
- On your first reconciliation for an account, you enter the beginning balance from your bank statement.
- On every reconciliation after that, the beginning balance is suggested automaticallyfrom your last completed reconciliation's ending balance.
- You can override the suggested amount from the reconciliation's edit screen, but a written reason is required — the override is recorded for audit.
If your very first reconciliation will not balance because the ledger started at $0, the fix is the opening balance entry described above — not an override. See the Bank Reconciliation guide for the full walkthrough.
Frequently Asked Questions
What date should the opening balance entry use?
The day before your start date. If you begin tracking on July 1, date the entry June 30 so your July reports show only July activity.
Can I edit or delete an opening balance entry after posting it?
Yes. Posted journal entries in DynaTax AI can be edited, deleted, or reversed — the reverse action creates an offsetting entry so the history stays intact. If the entry falls inside a period you have since closed, reopen the period first (see Close the Books).
I have several bank accounts. One entry or several?
Either works. A single migration entry with one line per account keeps everything in one place; separate entries per account are fine too. What matters is that every account with a real-world balance gets one — bank accounts, credit cards, and loans alike.
Where does the "Opening Balance Equity" account come from?
You create it. Add an equity account named Opening Balance Equity in Accounting → Chart of Accounts(category Owner's Equity) and use it as the offsetting side of your opening entries. It is a temporary account — your accountant reclassifies it into permanent equity later.