Tag Archives: beginning balance

Entering Beginning Bank Balance for Dynamics NAV (Navision) for a New Implementation

During a new implementation of Dynamics NAV (Navision), most Dynamics NAV (Navision) consultants understand how to load in A/R and A/P beginning balances. However, when it comes to bank beginning balance. The subject is usually more murky. On one hand, you need to put in the bank balance so it shows up on the bank ledger, on the other hand, if you put in just a lump sum, doing the first bank reconciliation will be a nightmare.

The goal when entering a beginning bank balance, is to update the bank ledger to ensure the amounts are correct. In addition, the bank transactions that are not cleared needs to be come up so it can be properly reconciled.

In this example, we’re going to assume the Navision client is going live on 1/1/2010.

Here’s the information we need from the client:
1. The G/L bank ending balance as of 12/31/2009
2. The last bank statement (from the bank obviously) on 12/31/09
3. The beginning G/L balance

First of all, the Dynamics NAV (Navision) client or the consultant needs to itemize what checks are outstanding (not cleared yet as of the 12/31/09 bank statement).

We all know that to load in beginning G/L balance, we use the General Journal. We typically use loading of beginning balance as the same step as we load in the bank balance.

Let’s say the Dynamics NAV (Navision) client has the following:
Bank Balance on 12/31/09: $10,000.00
Outstanding Check #123: -$2,500.00
Outstanding Check #124: -$500.00
Deposit on Hold: $1,000.00

While we load in the beginning balance, we set the Account Type as Bank Account. Doing this will automatically update the bank ledger and the G/L ledger based on your Bank Account Posting Group.

So your beginning G/L balance would look like the following:

Beginning Entry for Bank Balance for Dynamics NAV

Beginning Entry for Bank Balance for Dynamics NAV

Assuming you received a bank statement on 1/31/2010. There were no transactions that were cleared and no additional transaction made to the bank. Your bank rec would look like the following:
Doing so, the transactions will match exactly to the bank statement and to the G/L.

In conclusion, you can say that the bank beginning balance is the Bank Balance + Outstanding Checks – Deposits on hold.

Entering Beginning Inventory Balance

When moving from a legacy system into Dynamics NAV (Navision), one of the areas you want to try and avoid is messing with the inventory G/L accounts. Most systems are usually pretty good with open A/R and A/P accounts, they can be transferred using the “posting back to the same account” technique that most implementers do. The beginning A/R and A/P G/L accounts would be based on your entry on the General Journal. This is assuming that the A/R and A/P aging reports matches the G/L.

Inventory valuation is one of the areas where we find the most discripencies based on what is entered on the Item JournalĀ  from the physical count and the inventory valuation report from the legacy system. Depending on your requirements, sometimes it doesn’t make sense to go through line by line on the item journal to see where the differences are.

A rule of thumb I always go by is to let Navision determine what the inventory value should be in the G/L based on the positive adjustments posted from the Item Journal.

To accomplish this, do the following:

Suppose you have the following G/L accounts:
11000 – Inventory
58850 – Inventory Adjustment

When posting a positive adjustment in the Item journal, it will post a debit to Inventory and credit to Inventory Adjustment.

When you’re ready to enter your beginning G/L balance, enter the G/L balance for Inventory to account 58850. This way, the difference between the inventory G/L balance from the legacy system and Navision will be reflected on account 58850.

If you do not want to reflect the adjustment in the current period due to financial reporting reasons, you can adjust the difference into an asset account. We usually recommend create a separate account (i.e. 11100 – Inventory Suspense) to store this difference until you can depreciate it.

By not posting any general journal entries to the inventory accounts, you’ve ensured that inventory valuation reports will ALWAYS match G/L, making everyone happy in the process.