Filling the Initial Balance

Completing the initial balance in accounting is one of the important stages in preparing a company's financial statements. Among the steps that need to be taken to complete the initial balance are as follows:

• Creating a chart of accounts: The chart of accounts is a complete list of all accounts used in company accounting, such as cash accounts, receivable accounts, payable accounts, inventory accounts, capital accounts, and so on. Make sure you have completed the chart of accounts as explained in the previous chapter.

• Determining the initial balance: After the chart of accounts is created, the next step is to determine the initial balance for each account. The initial balance is the remaining amount from transactions that occurred in that account at the end of the previous period or the beginning of the year.

• Matching the initial balance with transaction documents: To ensure that the determined initial balance is correct, a check needs to be done by matching the initial balance recorded in the chart of accounts with transaction documents such as proof of payment, invoices, and so on.

• Correcting errors: If there are errors in determining the initial balance, corrections need to be made by adjusting the initial balance on the chart of accounts.

By correctly completing the initial balance, the company can ensure that the prepared financial statements are accurate and reliable. This is very important for the company because financial statements are used as a tool for making business decisions and accounting for the company's finances to stakeholders such as shareholders, employees, and customers.

The following will explain the process of completing the initial balance in the SOFICloud application.