Creating Opening Balances when Switching from Another System

Modified on Mon, 22 Jul 2019 at 02:11 PM

1. Getting Started

  • Pick a start date for when ALL work will be further completed in the Design Manager system - we suggest the first day of the month; for example: 6/1/17. Once you have picked a date, ALL new items and entries will be entered in Design Manager ONLY from this date forward. ***NOTE: ALL of the entries below should be entered the day before this transition date (the prior months' end  (or 5/31/17 for example).***
  • Create a list of clients with open receivables from your old accounting system (aged accounts receivable, customer balance detail or equivalent report that show clients and the invoices that the client has not yet sent payment for).
  • Enter a new project and client into DM for each client on the list. It may be a good idea to enter any outstanding invoice numbers and purchase order numbers into the project notes, as DM will assign its own numbers to these documents. You may also use the Transaction Description area of the new Invoice in DM.
  • Create a list of open client deposits (deposits collected from clients but not applied to an invoice yet).
  • Enter a new project and client into DM for each client on the list- unless they have already been entered as per above.
  • Create a list of open accounts payable (aged accounts payable, vendor balance detail or equivalent report that show vendors and payees to which money is owed) from your old accounting system.
  • Add a vendor in DM for each vendor on your list above. Glossaries - Vendors/Payees - Add.
  • Create a list of open vendor deposits (deposits sent to vendors but you have not received a final bill yet).
  • Enter a new vendor into DM for each vendor on the list - unless they have already been entered as per above.
  • You will also need:
    • A list of outstanding checks and deposits that have not cleared the bank.
    • The balances from the last bank statements of each account you have; including Credit Cards (these bank statements should have already been reconciled in your old system).
    • A trial balance (list of accounts with the current balance in each account) from your old accounting system. (Review the DM report - General Ledger - Chart of Accounts to be sure the necessary accounts are already in DM. If not, add them through the Account Glossary.)

2. Enter Client Balances

  • Client Deposits - add a new Retainer through Cash Receipts for the client's entire open deposit amount. You will be able to allocate this retainer manually, as needed, when you create invoices for the client. Once all are entered, the Open Client Deposit report in DM should match your Open Client Deposit report in your old accounting system.
  • Client Invoices - Enter a line item/specification in the newly created projects for each invoice on the client's open receivable list from your old accounting software. All you have to fill in is the price field in the lower right corner of the window. Make sure the price is equal to the total amount of the invoice from your list. Create a new invoice for each of these items using the Documents and Accounting window - Client Invoice button (Standard) OR by going to A/R - Client Invoices window (Pro). Next print the DM Aged Accounts Receivables report and make sure that it matches your old accounting system report.

3. Enter Vendor Balance

  • You will need to enter an operating expense for each bill listed on your open accounts payable report from your old accounting system. On each entry use the appropriate expense or cost of goods sold account. After you make the entries, print a DM Aged Accounts Payable report and check to make sure that the report matches your old accounting system report.

4. Enter Checks and Deposits

  • Enter another operating expense for each outstanding check written that has not yet cleared the bank. When entering the expense, use the hand check button to fill in the number and date of the check already written from your previous program. Make sure that you use either expense or cost of goods type of accounts when making these entries.

  • Enter a miscellaneous cash receipt for each bank deposit that has not cleared the bank. Next, enter one final miscellaneous cash receipt to serve as your opening cash balance. On this entry make the amount equal to the ending balance on your last bank statement. It is a good idea to use the retained earnings account for the miscellaneous cash receipts.

5. Entering General Ledger Accounts

  • Compare the trial balance for your old accounting system to your trial balance from DM. Your cash, accounts payable, accounts receivable, and client deposit account balances should already match if you have correctly followed the steps above. Write the correct numbers/amounts next to the accounts on the DM Trial Balance printed. Add a new Journal Entry for each account that does not match to make the two (DM and old accounting) Trial Balances match.

6. Entering Client Payments and Vendor Bills as they come into your company

  • When a client payment comes in for an invoice that was in your old system, enter it against the new invoice that you have created in DM. Make sure that you put it against the correct invoice in DM, as the invoice numbers will not match the invoice numbers from your old accounting system.

  • When a bill comes in from a vendor, enter it as you normally would into DM. If the bill is for a PO that was created in your old accounting system, you will have to create an operating expense for it because there will be no PO. If a vendor deposit is involved, enter that as a negative amount on the bill's distribution using the vendor deposit account. Enter the total amount of the invoice as positive numbers to the appropriate cost of goods sold or expense accounts.

7. ALL items that have not yet been invoiced in your old accounting system will need to be re-created in DM under their respective projects. Add new Items/Specifications into DM to get started.

To watch a video tutorial on how to enter your balances click here.

List of Default Accounts Set-up in the Design Manager system


DMCloud (Standard) version: