Opening balances and your cutover date

Who this is for

Landlords and property managers starting with eSamaHomes who already have money in a bank account. You do this once, when you move to eSamaHomes. Only the account owner can save, correct or confirm an opening balance.

Before you start

• Pick your cutover date: the day eSamaHomes starts keeping your books. A day that has already ended is easiest, because you need its closing balance.
• Know your bank account's balance at the end of that day. Use the balance after everything for that day has cleared, not a balance with pending items.
• Create your bank account in eSamaHomes first if it is not there: open Money → Accounting, stay on the Trust Accounts tab and click New Trust Account.

Steps

1. In the menu, open Setup → Opening Balances. If you have properties and no opening balance yet, the dashboard also shows a Set up now link.
2. Set the Cutover date.
3. Enter the starting balance for each account. A property manager enters one balance per owner per account. A landlord enters one balance per account.
4. Optional: type the bank's balance in Stated bank balance. eSamaHomes shows the Variance, so you can catch a typo before saving.
5. Click Save Opening Balances. Each balance shows "Posted <date>" and Not confirmed yet.
6. Reconcile the account with your first statement dated on or after the cutover date, then click Confirm opening balance on that row. See Reconcile your bank account. The balance then shows a lock and Confirmed.

Example

A landlord moves to eSamaHomes with a cutover date of October 13. The bank shows $20,567.66 at the end of October 13.

• Cutover date: Oct 13. Opening balance: $20,567.66.
• The September statement (ending Sept 30, $27,902.28) is before the cutover. Don't reconcile it: it can't confirm the opening balance. October's rent that tenants already paid is already inside the $20,567.66, so don't record it again in eSamaHomes.
• The first reconciliation is the October statement, ending Oct 31.

What happens next

• The balance can't be saved a second time. It is the starting point of the account's ledger, so every reconciliation and every account and owner balance counts it. The cash flow report doesn't: an opening balance is not money in.
• For a property manager, an owner can't be paid (payouts, distributions or reserve releases) until every account holding that owner's opening balance is confirmed.
• Diagnostics shows "has never been reconciled" for an account until it has a reconciliation that matches.
• Every movement in the bank after the cutover date has to be recorded in eSamaHomes: rent payments, bills, deposits returned, money you take out. Otherwise the next reconciliation shows a difference. A bill dated on or before the cutover date is refused, because the opening balance already includes it.

If something looks wrong

• The amount or date is wrong. Click Correct on the balance, enter the Correct amount and the Cutover date, and click Save correction. eSamaHomes reverses the old balance and posts the right one; nothing posted is changed. Once a reconciliation confirms the balance, it can no longer be corrected. The new date must also be after any statement you have already reconciled on that bank.
• Part of the money is tenants' security deposits. If deposits sit in the same bank as rent, use the Does … include tenants' deposits? card under the balance. Enter the Deposits part and click Split out deposits. eSamaHomes moves that part into a Security deposits account held in the same bank, and the two add up to the bank. If you have not chosen it yet, tick the box to keep deposits in the same account as rent, with a surety bond; check your state's rules first. If your deposits are in a separate bank, enter them on that account's own column instead.
• "Balances lock after the first is set." That's expected: an opening balance is posted once, and changed only with Correct.