An Opening Balance in your ledger is the amount of money in an account at the start of an accounting period. As in other accounting software, Digits AI records the opening balance of an account as a journal entry and calculates financial metrics like “Total Cash” seen in your Dashboard from this number.
When you connect your accounts, Digits will first try to retrieve the opening balance from your bank or from QuickBooks Online (QBO).
- If your data was imported from QBO, the Opening Balance will be migrated as is. You can see it on the Activity Log marked "imported from QuickBooks".
- If you’re starting fresh with Digits, you may see a journal entry with the memo “Digits generated opening balance” at the top, which represents the opening balance that Digits AI calculated and booked.
When Digits AI cannot resolve one, usually because the bank account is older than 2 years (Plaid only pulls in 2 years of transactions), Digits AI will automatically generate an Opening Balance and book it as a journal entry onto the ledger.
If for whatever reason, the Opening Balance does not match what you believe the Opening Balance was at the time of the journal entry, cash metrics do not align with what you would expect, or there is no Opening Balance written, this can be easily fixed.
Simply edit/update the debit and credit side amounts to the correct balance. To create a new journal entry, from the “All Transactions” tab, click “New Transaction.” Select a Pay In transaction, then enter the amount. Determining the right category for the Opening Balance depends on the nature of your business. Press Save & Close.
Alternatively, you can upload all your historical transactions through a CSV, to arrive at the correct Opening Balance as of the time Digits AI was able to start automatically improving your transactions.