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Understanding Beginning Balances

When you transition from your prior software system to e-automate, you need to transfer two types of account balances: balances for which you do not track transaction-level detail, and balances for which you do track transaction-level detail. For example, your accounts receivable account balance should be supported by all of your open accounts receivable invoices (transactions). You should be able to run an aged accounts receivable report to see the aging detail, and the totals on your aging report should match the total on your balance sheet for accounts receivable account for a specific accounting period.

For both types of account balances, you need to transfer the balance to the General Ledger (GL), either using an import for transaction-level balances or a GL entry for non-transaction balances.  Typically, ECI imports most balances that are transaction-level balances. These balances usually include open accounts receivable, accounts payable, inventory, and deferred contract revenue. Cashbook is transaction tracked but not imported by the ECI team. See your ECI trainer or conversion consultant about fixed assets. For accounts where you do not track transaction level detail, those balances are brought into e-automate using a GL entry.

Transaction-level details (also referred to as module-level details) are stored in the following modules (subsidiary ledgers): AR (Accounts Receivable), AP (Accounts Payable), CB (Cashbook), Inventory, Deferred Contract Revenue, Fixed Assets, and Leases. You are not required to use all of these modules. For example, if you choose to maintain a fixed assets balance in e-automate but use a separate software package to calculate depreciation and maintain the transaction-level detail, you need to transfer the fixed assets balance to the General Ledger but do not need to transfer module-level detail to the Fixed Assets module.

In most cases, you have the following three options for transferring the open module-level detail from your prior software system to the appropriate e-automate module:

Have ECI convert and enter your open module-level detail

Bulk import your open module-level detail using the applicable tabs of the Data Import/Export spreadsheet

Manually enter your open module-level detail using the applicable modules in e-automate

ECI recommends you use ECI whenever possible, the bulk import as a second option, and manual entry as a last resort.

E-automate does not allow an out-of-balance GL entry. When you transition your account balances, you create a GL account named Opening Balance Clearing. You use this account to offset all transitional GL entries, whether imported or manually recorded.
Note: You can create multiple opening balance clearing accounts for varying account discrepancies, if needed.

When you transfer the module-level detail or other account balances, you date each transaction using the date the transaction occurred, not the date you enter the information into e-automate. This dating system places all transitional transactions in e-automate prior to your go-live date as shown in the following illustration:

Once all of your transitional entries are recorded, you should be able to run an income statement and balance sheet in your old system as of the ending date in your old system, run the same balance sheet and income statement in e-automate as of the ending date of your old system ending date, and the balances should match.

You cannot simply enter the open module totals into the GL using a GL entry because the GL does not communicate GL entries to the subsidiary ledgers. For example, if you were to enter the accounts receivable balance with a GL entry, you could run a balance sheet and the accounts receivable balance would be present. However, if you were to run an aged accounts receivable report, you would not see any of the customer balances or invoices. The balance sheet runs strictly off the GL, and the aged accounts receivable report runs strictly off the Accounts Receivable module (subsidiary ledger). For this reason, to bring your open accounts receivable invoices into e-automate, you must use the Accounts Receivable module to have the entries post in both the GL and the subsidiary ledger. You can have ECI post these entries, use the bulk import process yourself to post the entries, or manually record each open accounts receivable invoice.

Once you transfer the module-level detail for all balances for which you choose to maintain module-level detail in e-automate, you can use a GL entry to move forward any other account balance that does not require subsidiary report tracking.

Below is a simple example and explanation of how a transition might look:

Entry

Name

Explanation

A

Accounts Receivable

The entry that occurs when importing or manually recording open transitional accounts receivable invoices. This entry debits the accounts receivable account via the AR module and credits the Opening Balance Clearing Account. This action gets the invoices and credit memos into the AR module and the GL with an appropriate balanced entry.

B

Accounts Payable

The entry that occurs when importing or manually recording open transitional accounts payable invoices. This entry credits accounts payable via the AP module and debits the Opening Balance Clearing Account. This action gets the vendor invoices and credit memos into the module with an appropriate balanced entry.

C

Uninvoiced Inventory Receipts

The entry that occurs when the balance for the uninvoiced inventory receipts balance is entered in e-automate. Typically, this entry is entered using a GL entry. This action credits the appropriate inventory receipts and debits the Opening Balance Clearing Account with an appropriate balanced entry.

D

Inventory

The entry that occurs when inventory quantities are imported or manually recorded. This entry debits the appropriate inventory accounts and credits the Opening Balance Clearing Account with an appropriate balanced entry. By importing actual items, this also identifies to the inventory module what inventory items you have on hand and the cost associated with each inventory item.

E

Cashbook Accounts

Summary of the entry that occurs when cash account balances are brought into e-automate. This entry debits the cashbook account via the Cashbook module and credits the Opening Balance Clearing Account with an appropriate balanced entry. This action identifies to the Cashbook module the beginning balance(s) of your cash account(s).

F

Balance Sheet

This entry represents the sum of all the entries—credits and debits—necessary to enter the balance sheet account balances. Whether this entry is offset to the Opening Balance Clearing Account as a debit or credit depends on your balance sheet account balances.

G

Income Statement

This entry represents the sum of all the entries—credits and debits—necessary to enter the income statement account balances. Whether this entry is offset to the Opening Balance Clearing Account as a debit or credit depends on your income statement account balances.

H

Deferred Contract Revenue

The entry that occurs when importing or manually recording unearned balances on contracts. This entry credits the deferred contract revenue account and records these balances on the contracts as well as offsets the Opening Balance Clearing Account. This action gets the deferred contract revenue into the Deferred Contract Revenue module with an appropriate balanced entry.

I

Fixed Assets

The entry that occurs when importing fixed asset balances. This entry debits the fixed asset account via the Fixed Assets module and credits the Opening Balance Clearing Account. This action gets the value of the fixed assets into the Fixed Assets module with an appropriate balanced entry. The accumulated depreciation entry also occurs but is not depicted here.

To summarize, you need to transfer module-level detail to the appropriate module (AR, AP, CB, Inventory, Deferred Contract Revenue, and Fixed Assets) in e-automate for any area where you plan to track this detail in e-automate. For all other accounts, you need to add an entry containing the account’s balance to the GL. If all your accounts balanced prior to this transition, then your Opening Balance Clearing account should have a zero balance at the end of the transition period. If the Opening Balance Clearing Account does not have a zero balance, then the amount remaining in the Opening Balance Clearing Account is closed out to retained earnings.

The sample balance sheet below indicates how balances are typically brought into e-automate.

 
 

 

Non-supported ReleaseNon-supported Release
ECI no longer supports this version of e-automate, and this version of the online help is no longer being updated. ECI recommends upgrading to the current release. Contact your account manager for more information.

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