I have data in Manager from the beginning of 2012. At the beginning of 2013 I had 1,399.38 as opening balance equity. When I started 2014 I had 1,399.38 in equity and 307.57 in retained earnings. When I hit the customize button and set the date to 1-1-2014 why didn’t the system update equity to 1706.95 and show that is the new starting balance. Because it did not do that it keeps changing my retained earnings and I don’t know what I started the year with.
Starting date on
Summary tab affects only the right side (Income & Expenses).
The left side (Assets, Liabilities, Equity accounts) is not affected by start date because those are permanent accounts. They don’t “close” and start from zero every financial year like income & expense accounts.
Opening balance equity is special account that holds difference of all opening balances entered into Manager. If this account holds any balance, it means you didn’t enter all opening balances since in double-entry accounting system, the sum of all opening balances must equal zero. This is something for your accountant to deal with.
Retained earnings is basically your profit/loss account. It doesn’t automatically clear. Depending on your business structure, retained earnings balance is either retained in the business for the next financial year or distributed as profit (or loss) to stakeholders. This is again something for your accountant to deal with.