Summary
In this article, we will cover how to identify and remove opening balance entries from your general ledger and explain why it is an important step in achieving completeness within your analysis.
Generally speaking, opening balance entries in general ledger/journal will need to be removed in order to pass the completeness check. This is because the opening balances for accounts are already provided when the Opening Balance file is uploaded to the Data Page. We have seen exceptions however where certain opening entries will need to be added back for the ledger to balance however this is on a case by case basis.
Identifying opening balance entries
When performing a completeness check, if both of the following statements are true, then it's likely there are opening balance entries within the GL:
- The activity in the general ledger does not match the activity in the trial balance
- The difference between the activity in the general ledger and the trial balance is equal to the opening balance
Identifying the opening balance entries within a general ledger can be a tricky process depending on the ERP or financial management software used to export the data.
Some ERP's, like DATEV, will have a specific opening balance identifier column. In the example shown below, the rows containing a 1 are opening balance entries:
Other exports may rely on a description field to identify the opening balance entries. These descriptions will vary, however usually they contain "Eröffnungsbilanz" or "EB" to denote them as opening balance entries.
Once the opening balance entries have been identified, they can then be removed from the general ledger.
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