Accounting

Opening Balances are critical to ensuring accurate cash metrics and reporting. In Digits, an Opening Balance represents the amount in a client’s bank account when Digits begins tracking data. It serves as the starting point for calculating metrics like Total Cash on the Dashboard and drives downstream reporting accuracy.

How Digits Sources the Opening Balance

When you connect a bank account for a client, Digits attempts to retrieve the Opening Balance through one of the following methods:

• From QuickBooks Online (QBO):
  If the client’s data is imported from QBO, the Opening Balance is brought in automatically. You’ll see this logged as "imported from QuickBooks" in the Activity Log.
  
• From the Bank (via Plaid):
  For direct bank connections, Digits retrieves up to 2 years of transactions using Plaid. If the account is recent enough, it uses this data to calculate the balance as of the connection date.
  
• If No Data Is Available (Older Accounts or Manual Setup):
  If Digits cannot retrieve the balance—typically because the account predates the Plaid window—it estimates the Opening Balance based on the first visible transaction and books it as a journal entry labeled "Digits generated opening balance."

When to Adjust the Opening Balance

You may need to update the Opening Balance if:

• The client’s Total Cash appears incorrect
• Older transactions are missing
• No starting balance entry appears in the Ledger

How to Adjust the Opening Balance

You can either edit the existing journal entry or create a new one.

Option A: Edit the Existing Entry

1. Go to Accounting > Ledger > All Transactions
2. Locate the Opening Balance entry (journal entry or Pay In)
3. Open the entry and adjust the amount
4. Click Save & Close

Option B: Create a New Entry

1. Go to Ledger > All Transactions
2. Click New Transaction
3. Choose Journal Entry
4. Enter the correct amount and assign the relevant accounts
5. Click Save & Close

Unsure of the correct amount? Refer to the client’s bank statement from the date of connection. Need journal entry help? See Journal Entries in Digits.

Backfilling Historical Data (Optional)

If you have a CSV of older transactions, you can backfill to refine the cash picture:

1. Go to Ledger > All Transactions
2. Click the dropdown next to New Transaction
3. Select Import Bank Transactions
4. Upload the CSV file

Digits will incorporate this data and improve the overall accuracy of metrics and history.

If you’re unsure how to handle a specific client scenario, or run into any issues, reach out to Digits Support. We’re here to help you keep your clients’ books clean and accurate.