A single opening balance journal voucher will be posted into the opening balance month (and eventually posted as a Journal Entry). This journal voucher will account for all of the general ledger account balances. Any sub-ledger (Accounts Receivable, Accounts Payable, Inventory, etc.) account balances will be posted to opening balance clearing accounts in the voucher and subsequently cleared through detailed sub-ledger postings.
It is recommended that you add one Opening Balance Clearing account to your ledger for each sub-ledger that is applicable. For instance, if you will be transitioning Accounts Receivable, Accounts Payable and Inventory, you should add three new General Ledger Accounts.
- One account named Opening Balance Clearing - A/R (located in the Assets drawer),
- One account named Opening Balance Clearing - A/P (located in the Liabilities drawer), and
- One account named Opening Balance Clearing - Inventory (located in the Assets drawer)
The journal entry for the accumulated depreciation accounts will be the values at the beginning of the fiscal year. The depreciation expense accounts should not be entered. These will be updated through a depreciation run.
Navigate to: Financials > Journal Vouchers
Click on Add Journal Entry to New Voucher
Set your Posting Date, Due Date and Doc. Date to be the last day before your Go-Live date, i.e. December 31, 2019.
Set Your Remarks to be SAP Business One Opening Balance
Key in each G/L account and the associated debit or credit balance.
It is recommended that in advance you have prepared a Trial Balance spreadsheet which has mapped your legacy accounts and balances to the new accounts used within SAP Business One to facilitate data entry.
Replace sub-ledger accounts with the newly created opening balance clearing account.
If you have both foreign and local currency balances, follow these additional steps.
Click on the Display in FC tick box at the bottom of the screen to display the Foreign Currency Columns.
lick on the Form Settings Icon:
Toggle on: Allow Unbalanced Transaction in FC
Enter your Debits and Credits in Foreign Currency. You may have to adjust your Local currency amounts if it tries to recalculate them for you but you can ultimately enter the balance you need.
When you are done entering your voucher, press Add to Voucher. On the Journal Vouchers Screen, press Update.
With a voucher you can prepare an unbalanced entry and save it if it will take you some time to complete entering everything. You can also run your SAP financial reports and include the results of your voucher without having to post the entry.
This allows you to check your entry and make adjustments prior to adding it as a final Journal Entry.
Once you have reconciled your financial reports between SAP and the Legacy system, you can post your Journal Voucher, turning into a Journal Entry.
The opening balance journal entry does not have to be posted prior to go-live. This entry will have to be completed before the next month end can be finalized.
After posting the journal entry(s) the accountant should print a trial balance from SAP and use it to compare balances from the trial balance produced from the legacy system. Any variances should be corrected with journal entries until the balances match for the posted accounts.
The client is required to have a trial balance produced from their legacy system after they have completed the month end process in the legacy system for the opening balance month.
It is highly recommended that the trial balance from the legacy system be exported into Microsoft Excel and modified so that the account structure and numbering matches SAP. Effort spent up front will result in time savings when comparing against the SAP trial balance and analyzing variances.
The journal entry will be manually entered and posted by the accountant or designated personnel. This can take anywhere from half a day to a day or more depending on the number of accounts and the scope of change between the old and new chart of accounts.
Exceptions if Historical Entries are Required
For every historical month a journal entry must be posted to account for the delta between monthly balances. For example:
In September the bank balance (CDN) needs to be $100,000.00 so a journal entry is posted. The journal entry contains all of the account balances for September and the debit to the bank account is $100,000.00.
In October the bank account balance needs to b $125,000.00 so a journal entry is posted for the delta, in this case a debit of $25,000.00 to the bank account.
Inventory can be posted to directly as a summary balance for historical entries.
The final month (opening balance month) then becomes the last set of delta postings. Inventory, A/R, and A/P will have to be reversed as the balances will be re-created using the appropriate sub-ledgers.