If you plan to use QuickBooks to track your business finances, then choosing a QuickBooks start date is the most important decision you will make in your setup process.
If your business is being set up at the same time that you begin using QuickBooks, then the system start date is the date you begin using the program. In this situation, there are no historical transactions to be entered and there are no opening balances. However, this is rarely the case. Most businesses either convert to QuickBooks from a hand system or from another program. The QuickBooks start date determines what information will be entered from the previous system.
To choose a start date that is best for your company, make sure to consider the following questions:
- When does the company’s fiscal year start?
- How close is today to the end of the fiscal year?
- Is there an accurate balance sheet and income statement for the current fiscal year?
- From how far back in time are you willing to enter historical transactions?
- Will you be tracking payroll using QuickBooks?
- How many transactions occur during a typical month?
The answers to the above questions will help you determine the most appropriate start date.
For example, if your company will be using the payroll feature, you should consider a start date that falls at the end of a calendar quarter.
Likewise, if it is almost the end of the fiscal year, it is usually better to finish the fiscal year using the old system of bookkeeping and begin the new fiscal year with QuickBooks. Although the start date can be changed at a later time, it determines most of the setup process. It is much easier to set a start date from the beginning than to try to change it later.
Also, be sure to choose a QuickBooks start date that is the last day prior to the desired starting period. For example, choose the start date as December 31 rather than January 1. This will enable you to run reports that isolate these balances from any new transactions. Analyzing and correcting opening balances is therefore easier. If necessary, opening balances can easily be changed, by simply editing the transaction dates in each of the account registers.
Do you have additional QuickBooks questions that we can answer for you? Our outsourced accounting team members are certified QuickBooks ProAdvisors, experienced in the design and implementation of QuickBooks, including training for your people. If you would like to know more, please send us a message and one of our experts will be in touch.
