Opening balance and other basic use questions. I'm a beginner who could use some help!
I'm keen to get my small business accounting in order through using Zoho books. It looks like it offers many powerful features. I watched many of the starter tutorials, and much of it made sense. But also, there is a fairly substantial level of assumed knowledge, even in the videos. When I actually got started I ran into lots of problems and things I didn't understand.
Here are some questions I would love some help with:
1.
So I was using another platform (though I wasn't using it properly) to do my accounting, and changed over to ZOHO books. So I my buisness is alreay running and I wanted to add a starting balance. First I connected my bank accounts, then I went into setting>opening balances. Under Bank I added my opening balance of about $500.
- Why is there an Opening Balance Adjustment of -$500?
- Now when I go into the banking tab the amount in Zoho Books is -$500, and my amount in bank is $500. This is confusing - what are these numbers telling me? Shouldn't it be clearer than that?
2.
- Can someone give me a definition of what accounts are?
For instance, I transfered some money from my main account bank account to another bank account I use to hold money I will need to pay for tax. When categorising it, I selected "Transfer from another account". Now I have to select what account it is from.
- Do I choose that it is from my "Main account", or "Advance Tax"?
- It makes sense that my "Main account" is clasified as an account. How are things like "Drawings", "Prepaid expenses" and "Undeposited Funds" also considered accounts? The "Undeposited Funds" account is not an account in the same way that my "Main account" is, so why are they both called accounts? This concept doesn't make sense to me.
It seems the definition of account is bigger than I currently think it is.
Anyway, I'm very confused. This is the sort of assumed knowledge that makes programs like ZOHO books hard to pick up. I would love some hlep so i can get to all the cool features of ZOHO books without being held back! :) Thanks for any help anyone can give!