Onboarding a New Bookkeeping Client: Opening Balances to First Close

A new small business client usually arrives with a part-kept ledger, a folder of statements, and an owner who wants a number by Friday. The first few weeks decide whether the engagement runs on proof or on guesswork. We work a fixed sequence with every takeover, and this page sets it out: inventory, opening balances, first reconciliation, first close.

Take a handover inventory before you post anything

Request the practical set first: bank and card statements, loan statements, the last filed return with its balance sheet, and the payroll filings. Add the aged receivable and payable lists, plus access to the accounting file. Take a backup of that file before anything changes; it is your evidence of the position you inherited.

Statements beat spreadsheets as evidence. If the prior keeper cannot produce them, have the client download them from the bank directly. Agree in writing who does any catch-up work, and to which date, before the first entry is posted.

Pick a takeover date at a statement boundary

The cleanest opening date is a bank statement boundary: a month end, or the end of the last period the previous keeper reconciled. Every account opens as at that single date. A mid-month start splits statements and invites cut-off errors that surface months later.

If the client wants a year start but the books only reconcile to a later month, open at the month and note the reason. The working paper records the decision; the engagement letter records who agreed to it.

Prove every opening balance to a source

Bank and loan balances come from statements, and the statement date should match the takeover date exactly. Receivables come from an aged list. Treat that list as a claim until tested: watch the first quarter's receipts, and write off early what proves uncollectable. Payables follow the same rule in reverse, tested against what you actually pay.

Fixed assets come across with the prior depreciation schedule, and accumulated depreciation travels with them. Opening equity is whatever balances the sheet. It is a plug, not a measured balance, and the working paper should say so plainly.

Reconcile at the takeover date, not just at month end

Reconcile each bank and card account as at the takeover date itself. Note the reconciling items you inherit, such as outstanding checks and deposits in transit. That baseline is what stops an old uncleared check from being counted twice later, or dismissed as a bank error.

Old uncleared items are a judgement call. Some banks refuse checks older than six months, and some jurisdictions require the funds to be restored to the ledger or eventually remitted. Treatment depends on policy and place, so record the decision, date it, and apply it consistently.

Do you open fresh, or move the history across?

Some owners want years of history carried into a clean file; others are happy to open fresh with proven balances. Decide this early, because it changes the work completely. A fresh open is ordinary bookkeeping. Moving transaction history intact between files is a data migration, and its failure modes are not ledger mistakes.

If history must move, preserve the source backup first. Then verify that the destination trial balance ties to the source before anyone posts to it. For QuickBooks data, that work belongs with specialists; see our QuickBooks data migration service when the client needs the whole ledger carried over.

Close the first month as if it were year end

Run a full close in month one, even if the client never has. Cut-off comes first: unrecorded invoices, bills received but not entered, payroll earned but unpaid, and any check written before the date but cashed after. State the reporting basis in the pack, because cash and accrual tell different stories.

Keep the pack small: a profit and loss for the month, a balance sheet at takeover and at month end, and a few lines of plain commentary on what moved. A correct ledger earns its keep only when the owner can act on it without translation.

When does a takeover stop being bookkeeping?

Some faults are not yours to fix. If totals shift without a transaction, reports disagree with each other, or a balance refuses to tie after every ordinary explanation is exhausted, the file itself may be damaged. Preserve the backup, stop posting, and have the file examined before more entries land on it. See our QuickBooks error code repair service for files that misbehave in ways bookkeeping cannot explain.