If you use the Expenses & Ledger module in v10 and converted from version 9 you MUST READ this article to properly enter your Beginning Balances.

Background

Beginning balances are not converted and must be manually entered in v10. Because version 9 handled payments differently than v10 this can affect how your beginning balances should be entered.


Use Balances from Version 9

If you transition to v10 at the end of your fiscal year (Dec. 31st, for example) you can close the year in version 9. This will automatically calculate your beginning balances for the New Year. Then, run the Trial Balance report (also in version 9) for the first month of the New Year and manually enter the beginning balances from the report into v10. The one exception could be the bank account, which may need to be adjusted, as explained in the rest of this article.

When Payments Hit the Bank Account

In version 9 a payment from a family or agency was immediately counted toward your bank balance as soon as it was posted on a Ledger Card. So a $100 Pmt by Check would increase your bank asset right away. Of course this isn’t how the real world works. You actually have to deposit the money in the bank before it counts as part of your bank balance.

In v10 payments are handled in a more realistic way. That is, a payment doesn’t count toward your bank balance until you close it as part of a Deposit Report. There are two parts to the process:

  1. When you record a payment it is temporarily included in your asset called “Undeposited Payments”.
  2. Later, when you close that payment in a deposit, it moves out of “Undeposited Payments” and into your bank account and is now included in your bank balance on reports.

How Deposits are Converted

A deposit may include individual payments posted on different days. When Deposit Reports are converted the date of the latest entry is used as the “date of deposit”. For example you may have a deposit with some payments dated in December but others dated in January, say the latest one being January 3rd. The date of deposit would be treated as January 3rd.

How Beginning Balances are Affected

If any deposits include payments dated in both the prior year and the current year, the portion of that deposit dated last year must be counted as “Undeposited Payments” when you enter beginning balances. DO NOT count them as part of the bank account balance. To offset this (so your debit & credit columns stay in balance) you’ll subtract the same amount from the beginning balance of your bank account.

Example:

  1. Version 9 shows an ending balance of $1,000 in the bank account for the end of the prior year.
  2. A deposit dated in January included $100 in payments recorded in December.
  3. The beginning balance in v10 for “Undeposited Assets” would be $100.
  4. The beginning balance in v10 for the bank account would be $900.

How To Determine the Amount

You’ll need to run a report.

  1. From the main screen of Family Data & Accounting: Go to Reports > Standard Reports > Family Accounting > Deposit Report.
  2. Choose the report named Deposit Report Detail and pick a Date Range that includes at least the first week or two of the current year.
  3. Examine each deposit on the report looking for individual payments dated in the prior year. Keep a running tally and use it as the amount for the beginning balance of your “Undeposited Assets”. Also subtract it from the beginning balance of your bank asset.