Entering opening balances
If you are moving to REI Hub from another accounting system or have already filed taxes on one or more of your rental properties, you may need to enter Opening Balances into REI Hub. An opening balance entry sets the account balance and allows you to keep accurate records without having to recreate detailed transaction histories.
Some key things to know about opening balances in REI Hub:
- Setting opening balances is essential to maintaining an accurate Balance Sheet report. Your balance sheet will not properly reflect your portfolio without the opening balances set.
- The Balance Sheet tracks the book value of all business assets and liabilities, as well as the capital contributions and distributions of owners and profits that you have reinvested. It will always balance according to what is known as "the accounting equation"—Assets = Liabilities + Owner's Equity.
- REI Hub uses the account 'Autobalance' for opening balances. For example, an opening balance entry for a loan would credit the loan account and debit Autobalance.
- If you are transitioning bookkeeping systems anytime OTHER than January 1st, Revenue and Expense accounts also need a summary entry (an opening balance) for activity between January 1st and the day before your bookkeeping start date.
To enter an Opening Balance in REI Hub:
1) Click the 'Add Transaction' button at the top of the left-side menu
2) Select the Opening Balance transaction type
Opening balance transactions should always be entered for the day before your current bookkeeping period begins. So, if your bookkeeping period begins January 1, 2024, you would select December 31, 2023, as the date for your opening balance entries.
If you already have a Bookkeeping Start Date (which you can edit from Portfolio Settings), the system will automatically default the date to the day before.
4) Select the Account and enter the amount.
For a typical rental property purchased prior to the current bookkeeping period, you will generally make at least four opening balance entries—one each for Land, Buildings, and Accumulated Depreciation and one for the loan account (if the property has an associated loan). We recommend you create a fixed asset first and then enter the opening balances in the fixed asset.
If your bookkeeping start date is the beginning of the calendar year, you do not need to enter opening balances for Revenue and Expense Accounts (as they are reported annually).
5) If desired, click Add Line to enter multiple opening balances at once.
The number of opening balance entries you need to make will depend on when you are transitioning bookkeeping systems and what data you track.
For a typical rental property purchased prior to the current bookkeeping period, you will generally make at least four opening balance entries—one each for Land, Buildings, and Accumulated Depreciation and one for the loan account (if the property has an associated loan). We recommend you create a fixed asset first and then enter the opening balances in the fixed asset.
6) Click Save Opening Balance.
View, edit, or delete opening balance transactions from the Booked Transactions page. Use the Filter to narrow your search by date, account, or transaction type.