Recording Inventory in the Opening Balance

The opening balance lets you establish your accounting position at the start of your use of the platform. If this isn't your first accounting period and you previously managed your books in another tool, setting up your opening balance means you won't have to start from scratch — especially when it comes to your inventory.

In this article, you'll find:

• Entering inventory in your opening balance
• Accounting implications of carrying forward inventory

Let's dive in!

Entering inventory in the opening balance

When setting up your opening balance, you can enter the inventory you held at the end of your previous accounting period.

Go to Settings > Accounting > Opening Balance (Edit or View). On the opening balance configuration page, click Inventory. You can then add your inventory by entering the label, value, and remaining quantity. Click Add when everything is filled in.

Accounting implications of carrying forward inventory

Entering inventory in the opening balance has several implications:

• A journal entry is created in account 371000, which will appear in your statement of financial position.
• The inventory item is created on the Product Sales > Inventory Management page.

Unlike inventory valuation at closing, entering inventory in the opening balance does not automatically generate a reversal entry. You can enter this beginning-of-period reversal manually using the journal book entry feature.

Example reversal entry for inventory carried forward in the opening balance

Learn more:

Carrying forward your accounting history using the opening balance