Why does Tuhund create balancing account when we enter opening balances?
We are entering opening balances using the form shown by Mr. Abhishek. System has created sub-ledger with name balancing account automatically. We have no such ledger in our old system. Why has Tuhund created this ledger? Is it required and will this not show as mismatch compared to our old accounting system?
Balancing account in Tuhund is created as a control account. We have used a different name because it is possible that the organization already has a control account in old system. Yes, this account is necessary and it is created automatically by the system if you are using single entry system, which in Tuhund is permitted only for entry of opening balances. In most of the cases we enter opening balances for you as part of implementation process. It is an automated process where we upload preformatted excel files. However, in this case too balancing account is created. Once all the data has been entered balancing account automatically becomes zero and we close the account. Since the balance becomes zero in the opening balance, it does not show in your balance sheet. Your opening balance sheet in Tuhund with exactly match closing balance sheet from your old accounting system to the last penny, with exactly the same chart of accounts unless you choose to modify it.
It is alright then. I know your staff was insisting we let you enter the opening balance as it would be much faster but we preferred to enter ourselves as this gives us a chance to audit and make any corrections and adjustments at the same time. We have a large number of ledgers that are no more required. We can clean up this way. God willing, we will finish it in 2 days.