Setting up or migrating accounting records: opening balances, chart of accounts, and policies

When you start a new ledger, enter balances as of a specific date, taken from reliable sources. Use bank statements for cash, aging reports for receivables and payables, lender statements for loans, and a fixed asset list for equipment. The difference goes to equity.

Do not guess. If you cannot support a balance, say so in a note. A defensible opening balance is better than a tidy one with no backing.

Choose a cutoff date, often the start of a month or year. Close the old system as of that date and keep a copy of reports. Export the trial balance, open invoices and bills, and the lists of customers, vendors, and accounts. Import or enter them, then verify the new trial balance matches the old at the cutoff. Keep read access to the old system until the first closes in the new one are done.

Over time, charts of accounts fill with duplicates, vague names, and accounts used once. Cleaning up does not have to erase history. Merge accounts that mean the same thing, rename unclear ones, and mark old accounts inactive rather than deleting them. Aim for accounts that answer questions you actually ask.

Check that your tax and reporting needs are met after the change. Map each account to the report line it feeds.

Track each long-lived asset with its description, purchase date, cost, location, and depreciation method. A purchase receipt is not enough, because you also need to know when it was placed in service, what happened to it later, and the accumulated depreciation. Reconcile the register to the ledger every year.

A short policy manual records the decisions your books depend on: the accounting method, the capitalization threshold for equipment, how you recognize revenue, how long you keep records, who approves what, and the close schedule. It does not need to be long. It lets a new bookkeeper follow the same rules and shows lenders you manage with care.