If you are a new company you can start using ERPNext accounting module by going to chart of accounts. However, if you are migrating from a legacy accounting system like Tally or a Fox Pro based software
We recommend that you start using accounting in a new financial year, but you could start midway too. To setup your accounts, you will need the following for the “day” you start using accounting in ERPNext:
If you were using another accounting software before, firstly you should close financial statements in that software. The closing balance of the accounts should be updated as an opening balance in the ERPNext. Before starting to update opening balance, ensure that your [Chart of Accounts](/docs/user/manual/en/accounts/chart-of-accounts.html) has all the Accounts required.
* For all assets (excluding Accounts Receivables): This entry will contain all your assets except the amounts you are expecting from your Customers against outstanding Sales Invoices. You will have to update your receivables by making an individual entry for each Invoice (this is because, the system will help you track the invoices which are yet to be paid). You can credit the sum of all these debits against the **Temporary Opening** account.
* For all liabilities: Similarly you need to pass a Journal Entry for your Opening Liabilities (except for the bills you have to pay) against **Temporary Opening** account.
For each Account, enter opening value in the Debit or Credit column. As per the double entry valuation system, Total Debit value in a entry must be equal to Total Credit value.
After enter opening balance for each account, Save and Submit Journal Entry. To check if Opening Balance for an account is updated correctly, you can check Trial Balance report.
If your Balance Sheet has many Accounts, then updating Account Opening balance from single Journal Entry can lead to performance issues. In such a scenario, you can multiple Journal Entries to update opening balance in all the Accounts.
If you are updating account opening balance in few accounts at a time, you can use **Temporary Opening** account for balancing purpose. In the standard chart of accounts, a Temporary Opening Account is auto-created under Assets.
In the Journal Entry, manually select an Account for which opening balance is to be updated. For each Account, enter opening balance value in the Debit or Credit column, based on it's Account Type (Asset or Liability).
To update stock opening balance, create [Stock Reconciliation entry](/docs/user/manual/en/stock/opening-stock.html). Based on the valuation of items's update in the Warehouse, balance will be updated in the Warehouse account.
Opening balance for the fixed asset account should be updated via Journal Entry. Assets which are not fully depreciated should be added in the [Asset master](/docs/user/manual/en/accounts/managing-fixed-assets.html). For adding Assets in your possession, ensure to check **Is Existing Asset** field.
Since you have already booked the income or expense on these invoices in the previous period, select **Temporary Opening** in the “Income” and “Expense” accounts.
If you don’t care what items are in that invoice, just make a dummy item entry in the Invoice. Item code in the Invoice is not necessary, so it should not be such a problem.
