Opening balances in accounting: checking the starting point before cleanup

Agree the date and ledger version from which the new accounting work begins. Obtain prior final statements, trial balance, and reconciliations. Identify whether those figures were reviewed or remain provisional.

Keep the starting point separate from transactions imported afterward. Mixing opening balances with historical activity can count the same event twice.

Tie bank, card, processor, receivable, payable, loan, payroll, inventory, and asset balances to source records or schedules. Check both existence and completeness.

An account missing from the old chart does not establish that the obligation did not exist. Ask management about active banks, financing, payment channels, and unpaid bills.

Review contributions, distributions, retained results, and prior adjustments. Have the accountant assess unexplained opening equity entries.

For illustration, a $10,000 difference between source assets and liabilities should not be posted to opening equity solely to make the file balance. The reviewer needs to establish what event or missing record explains it.

Document the original balance, evidence, proposed adjustment, affected period, and approval. Ask the relevant adviser whether prior reports or returns need attention.

Keep an unresolved item list if records cannot be obtained. A limitation should remain visible instead of becoming a confident starting figure by default.

Save the reviewed trial balance, schedules, adjustments, source documents, and open questions. Confirm that the incoming team can roll balances into the first new close.

Reconcile the first month's movement back to that starting point. The company should be able to explain both how the opening figures were established and what changed afterward, with assumptions and corrections clearly retained.

Check the cutoff of historical imports against the opening date. An old transaction can be valid source evidence while already included in the opening balance. Document whether it should migrate as detail or remain in the retained archive.