If you are out of balance in the Beginning Balances for General Ledger Accounts window, Sage 50 displays a warning message indicating that an equity account will be created (or updated) to contain the difference or out-of-balance amount.
This account will be named Beginning Balance Equity, and its type is Equity-Doesn’t Close. This account does not appear in the Beginning Balances window, but it will appear in the list of accounts and on financial statements and general ledger reports.
Try to find the reason for the Sage 50 Balance sheet’s out-of-balance situation, and correct it if possible. (Select Cancel when Sage 50 displays the warning message.) If you are entering beginning balances from financial statements supplied by your previous accounting system or by your accountant, you most likely made an error in data entry. Make sure you didn’t leave out an account or balance and that you entered all amounts correctly.
If you still cannot find the error, you can select OK in the warning message. Your books will be in balance, and you can proceed with setting up your company. You can even begin entering and posting transactions. (Remember that once you post transactions, you will need to enter prior-period adjustments rather than sage 50 beginning balances. Although both are entered using the Maintain Chart of Accounts Beginning Balances button, Sage 50 will display the proper window according to whether the transaction has been posted.) Then later, if you find the cause of the out-of-balance situation, you can go back to the Beginning Balances or Prior Period Adjustments window and correct the situation. Once the Beginning Balance Equity account has no transactions associated with it, you can delete the account in sage 50.
- Continue entering beginning balances.
- Select OK when you are through.
What do you want to do next?
Enter General Ledger Account Beginning Balances
If you are just starting out with your company and have not posted any transactions, Sage 50 assumes that you are entering beginning balances for your accounts when you select the Beginning Balances button. If you have posted transactions, Sage 50 assumes that you are entering adjustments to your funds for a period in a prior year. If you enter a new account, Sage 50 assumes that this account has a zero balance. You may find adding all necessary accounts easier and then creating one cumulative beginning-balance entry.
- From the Maintain menu, select Chart of Accounts. Sage 50 displays the Maintain Chart of Accounts window.
- Select the Beginning Balances button. Sage 50 displays the Select Period window.
- Select the period in which you want to enter beginning balances. You can select from previous, current, or future periods.
- Select OK. Sage 50 displays the Chart of Accounts Beginning Balances window.
- Click or tap on any of the white cells in the grid to add an amount. (The gray cells are for viewing purposes only.)
- Enter all the beginning balances for the accounts. Scroll the list box to make sure the account amounts are correct. If necessary, you can enter a negative amount; just type a minus sign before the number. Note that for each period, a running beginning balance is kept. Thus, if you change an amount in Period 1, the amounts for subsequent periods are also changed. However, if you change an amount in Period 2, the same account balance in Period 1 is unchanged.
- Select the OK button when you’re finished.
Add a New Account in G/L Beginning Balances
- In the Beginning Balances window accessed from the Maintain Chart of Accounts window, select the New button. Sage 50 displays the Enter New Account window.
- Enter an account ID and description for the account. To display a list of existing accounts, type? in the G/L Account ID field, or select the Lookup button.
- The account ID determines how the account is identified and sorted in the chart of accounts list. Most charts of accounts are set up with specific account types grouped together.
- Select a type for the account.
- Select OK.
Maintain Chart of Accounts
The Maintain Chart of Accounts window is used to
- add a new account
- define an account type
- modify the description of an existing account
- delete an account
In the End!
After reviewing the Sage 50 balance sheet, it is clear that there are some areas of the company that are out of balance. The most important thing for companies to do when their balance sheet is out of balance is to take corrective action. By addressing these issues, the company can begin to build a more sustainable future and improve its financial health.