Opening balances
Your books start on a date you choose. Everything that happened before that date is represented by a single opening balance entry rather than being replayed transaction by transaction.
This is how every accounting system handles a migration, and it is the right approach: replaying years of history would restate periods you have already reported on and already paid tax against.
What the opening balance contains
Upscale works most of it out for you.
| Figure | Where it comes from |
|---|---|
| Accounts receivable | What each customer still owes on open invoices, less any unused credit notes |
| Accounts payable | What you still owe each supplier on open bills |
| Inventory | The value of stock on hand, taken from the cost layers |
| Bank and cash | The balances you enter for each account |
| Everything else | The balances you enter |
Receivables and payables are recorded per customer and per supplier, not as one lump. That is what lets your ageing report be correct from the first day rather than after the first payment.
Reviewing before you commit
Upscale shows the full entry before anything is written: every line, the totals, and the difference between what the documents say and what the balances you typed say.
That difference is posted to Opening Balance Adjustments. It is not a failure. It is the honest statement of "value we could not attribute to a specific account", and it is usually where your retained earnings and owner's equity belong.
A large unexplained difference is worth investigating before you go live, which is exactly why it is shown rather than absorbed quietly.
Stock and costing
At the moment your books go live, Upscale creates one cost layer per item per location, holding the quantity you have on hand at that item's purchase cost.
This is what makes FIFO available to every organization immediately, not only to new ones. With a single layer, FIFO and weighted average produce identical costs, so adopting FIFO at go-live changes no figure at all. The two methods only start to differ once you make your next purchase, and from then on FIFO gives the more traceable answer.
You can choose weighted average instead, at any time. See Inventory Costing.
After you go live
Transactions dated before your start date never post to the ledger. Their value is already in the opening balance, so posting them as well would count it twice. They stay in the system, they still show in document lists and sales reports, and you can still open them.
Transactions dated on or after the start date post normally.
The opening balance can only be created once. If it is wrong, void it and post a corrected one rather than adding a second.
Choosing a date
The cleanest choice is the first day of a financial year or a quarter. The figures you enter are the ones you already closed that period with, so there is nothing to work out.
Going live mid-month works, but you will need the account balances as at that exact date, which usually means waiting for a bank statement.