Overview
When changing your Opening Balance to a different date, it's important to understand how your DoorLoop Balance will be affected by the transactions you've already recorded.
What Happens to Payments Dated Before Your New Opening Balance Date?
Payments recorded before your opening balance start date will always add to your DoorLoop Balance. If a payment is recorded prior to when an Opening Balance is entered, it will cause your account balance to be higher than it should be.
This is because you're adding a payment that's already been recorded as part of your opening balance.
Example:
The DoorLoop Balance for my bank account as of 4/1 is $10,000.00, and 4/1 is my chosen Accounting Start Date.
Prior to that, I recorded a $1,000.00 lease payment on 3/1.
My DoorLoop Balance will now incorrectly read "$11,000.00" instead of "$10,000.00." This is because the prior payment from March will still be added to the Opening Balance I recorded as of April 1st.
How Do I Reconcile My Bank Account Balance If I Need to Record Transactions That Occurred Before My Accounting Start Date?
If you still wish to record lease transactions that occurred before your Accounting Start Date, record lease payments as Credits to the Opening Balance account instead of payments, since a lease credit won't add to your bank account balance.
Note: We recommend you don't backdate transactions before your Accounting Start Date, as it creates more work and more room for error.
Example:
I already have $10,000 of income recorded in the account's Opening Balance as of April 1st. But I wish to record a $1,000.00 rent payment made in March.
Since March is before my Opening Balance date, I'd record a $1,000.00 lease Credit to the Opening Balance account, so it doesn't record as an additional payment and subsequently make my DoorLoop Balance $11,000.00 instead of $10,000.00.
Understanding these effects ahead of time helps keep your DoorLoop Balance accurate when working with transactions near your Accounting Start Date.
Disclaimer
The information provided is not offered by a licensed accountant, should not be considered accounting, financial, or legal advice, and is provided (and intended) for general informational purposes only. Do not rely on the information provided; rather, please verify applicable accounting laws and regulations independently. This information should not be considered a substitute for professional advice and does not offer Generally Accepted Accounting Principles (GAAP). The author and publisher are not liable for any damages or losses resulting from reliance on this information.