Retained Income - V20.8.47

Greetings ,

I’ve checked the tutorials and forum posts and I’m still stumped.

I am migrating to Manager and have a issue with Retained Income.

My FY starts on 01 July and I’ve captured the P/Y P&L journal on 30 Jun with the balancing entry to Retained Earnings.

I’ve captured opening balances in Debtors, Creditors, Bank and Ledger accounts.

I’ve checked the Starting balances report and it balances to my old ledger.

The problem I’m experiencing is that Balance Sheet opening balances have a Manager backend entry which effects Retained Earnings.

Retained Earnings is 100% in balance with the P/Y P&L Retained Income journal entry.

The backend Opening Balance(B/S) transactions distort the retained income account and throw it out of balance.

How do I remedy this?

Please do not send private messages with general questions. Your post has been moved to the public forum, where it can receive more attention.

If I understand what you did, this was a mistake. Starting balances should match the closing balance sheet balances of your prior accounting system. They do not involve the profit and loss statement. So, if your prior system was not perpetual, you should have transferred prior year net income to the old system’s retained earnings account before you began migration.

If I have misunderstood what you were doing, you will need to illustrate with screen shots. In particular, you need to explain what you mean by this:

especially after saying that the Starting Balances report matches your old accounting system. Further, exactly what do you mean by this:

In taking up the P&L Journal as Jun 30, your Start Date needs to be also Jun 30 not Jul 1

Thanks for the response.

I am using 30 June as my start date.

I did a P&L journal for 2 reason
1.To adjust retained earnings to match my old ledger
2.To enable prior year income statement comparisons

If i only capture Balance Sheet Opening balances, Retained Earnings would not balance because it contains years of P&L year-end entries.

What am i missing?

The Retained Earning is the balance of previous years P & L

Have a look at your year end B/S - is your Retained Earnings split into two accounts perhaps

Only one retained income account which balances per P&L jnl. As soon as i capture the opening balances it double entries to retained income which throws out retained income balance.

Why are you using a P&L journal - this is not necessary if your start date is the start of the financial year?

As I said, you need to illustrate with screen shots.

If you do this entry first, your Balance Sheet Retained Earning should show Nil - Zero.
If not then there is a problem with the Journal.

That Journal entry is completely separate (stands alone) from the entry of the Balance Sheet opening balances, that is, the Retained Earnings in the Journal, doesn’t change, modify or adjusts the Balance Sheet Retained Earnings value which will contain all previous years of the P&L.

So step 1 - enter the journal - check that the BS Retained Earnings account is zero
Step 2 - enter the BS opening balances as per the closing balances of your previous system.
Step 3 - Summary tab EDIT button - have the start date as Jul 1 to what ever end date you want.

After that the P&L accounts should have zero values and the Balance Sheet should match your previous system’s closing Balance Sheet.

Have you created capital account(s) either via the capital accounts tab or via settings chart of accounts? This is necessary if you clear some or all of your retained earnings to capital account(s) each year.

Take this simple example:
Starting balances from previous system.
Cash Asset: $1,000
Fixed Asset: 12,000
Capital John: 5,000
Capital Jenny: 5,000
Retained earnings: 3,000

If you use a start date of 01/07/2020 and enter starting balances for the cash asset and the fixed assets the starting balances report will look like this:

Then enter starting balances (credit balances) for the 2 capital accounts and the report will look like this:

The capital accounts I used were set up via settings-> chart of accounts but it works the same way for capital accounts set up via Capital accounts tab

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