Add an adjusting entry for a new opening balance

Use this topic if you've been using Buildium for a while and you've recently decided to use the banking features as well. If you've got a sizeable amount of undeposited funds and a negative bank balance, this topic will help you get ready to bank with Buildium. Each bank account you use or have set up in Buildium will need to be corrected. Perform each step below for the appropriate bank account(s).

1. Choose a date for when you'd like to have accurate numbers in Buildium.

   For example, if you plan to have accurate numbers in Buildium beginning in January, you'll want to gather numbers as of December 31 at close of business.

2. Gather the correct, "real world" numbers by property.

   For example, Main Street has $1000 in the bank as of December 31, South Street has $4050, and Wallaby Way has $300. In total, there is $5350 in the bank and this number is reconcilable to your bank statement as of December 31.

3. Correct any liabilities on any current/past ledgers as of the accounting start date. Issue any necessary refunds to zero them out.
   
   Use the Rent Roll Report for Current and Expired leases, and review the Security Deposit and Prepayment columns for each unit you manage. Verify if the Current leases are accurate, and all Past Leases should be $0.
   
   This will correct the security deposit balances for your properties, as well as your bank account balances for your properties. Without this step, your property security deposit balance will be inaccurate going forward.
   
   For example, old tenants have moved out, but their lease ledger still shows they have a security deposit held by you or the owner. Issue a refund for the security deposit using your new accounting start date and the appropriate bank account. 
4. Correct the management income account balance as of the accounting start date - Bring the balance to zero or the accurate balance using a check hitting that income account out of the correct bank account.
   
   For example, you may have Late Fee Income and Application Fee Income as Management Income Accounts, however, you did not "Pay out management income" accounts in the system. If you don't pay out management income accounts, then you will have money left in your bank account(s) which belongs to you. This money in the bank account is affecting your bank account balance, causing errors. Once you correct your accounting start date, you will need to pay out your management income accounts going forward to maintain an accurate bank balance. For more information, see, "How do I pay out management income accounts to my company?" 
   

5. Fix undeposited funds. Make a single, large bank deposit to deposit any payments that were put into the bank before your chosen date from step 1 above. see "Bank deposits"

   For example, you have $10,000 in undeposited funds from payments that were made during the eight months prior to making the decision to use Buildium's banking features. Deposit all of these funds into a single bank deposit.

   If any of the payments are recent and were deposited after December 31 (our example accounting start date), do not include them in this adjusting bank deposit. Instead, you'll add them in January now that you're using Buildium's banking features.

6. Gather the Buildium numbers by property. To get these numbers, run a cash basis balance sheet "as of" your chosen date. see "Balance sheet report"

   For example, Buildium's balance sheet shows that Main Street has $1500, South Street has $5000, and Wallaby Way has -$200 as of December 31.

7. Create a list of adjusting transactions that you'll need to make:

   property	"real world" totals as of December 31	Buildium totals as of December 31	Necessary adjustment
   Main Street	$1000	$1500	subtract $500
   South Street	$4050	$5000	subtract $950
   Wallaby Way	$300	-$200	add $500
   etc
   etc

1. Create adjusting entries, one per property. Your date will be December 31 and you should use a memo like "adjusting entry". see "Other Bank Transactions"
2. Rerun your balance sheet to make sure the numbers in Buildium match the numbers in your real world calculations.

3. Reconcile your bank account. Include all of the deposits before your date, all checks that have definitely cleared, and all of your adjusting transactions.

   If you can successfully reconcile, you're all set!

   If you cannot reconcile, then you should look back to make sure all of your properties' money has been accounted for.
   
   Special Notes: If you review your Balance Sheet for a property, and find that there are "Pending EFTs" on your "as of" date, please contact Buildium Customer Care for assistance.