How do I set up opening balance for my new business?

When you start a new business, your opening accounting balances are NIL and you start building your financial records from scratch.

Let’s take an example.

You are starting a graphic designing firm. You will have to put in money and also contribute other assets, like computer systems, some other equipment, offies suplies etc. to get your business going. This money and/or asset is your capital contribution.

Now, you need to record this investment that you made. In this case, you personally gave the money to the business. That is called Equity. So you’ll need to create an Equity/Asset account, under the name : Owner’s Contribution.

This will finalize entry and create a new opening balance for your business account. You can start recording all your business transactions here on.