Guide
Opening and closing balances, explained
Every statement starts with one number and ends with another. Those two numbers connect it to every statement before and after.
Definitions
The opening balance is the amount in the account at the start of the statement period, before any of the statement’s transactions. It may be labelled “Balance brought forward”, “Previous balance” or “Start balance”.
The closing balance is the amount at the end of the period, after every transaction. It may be labelled “Balance carried forward”, “New balance” or “End balance”.
The equation
Opening balance + money in − money out = closing balance. This always holds for a complete, genuine statement. If it doesn’t, a transaction is missing, duplicated or misread.
The link between statements
This month’s closing balance is next month’s opening balance. That is what lets a set of statements be checked for completeness: if one statement’s closing balance doesn’t match the next one’s opening balance, something is missing between them.
Overdrawn balances
When an account is overdrawn, statements show the balance with a minus sign, or with “OD” or “D” after it. An overdrawn opening balance means you started the period owing the bank.
How to check a statement’s balances
- Find the opening and closing balancesUsually in a summary box at the top, or the first and last balances in the list.
- Total money in and money outAdd up each column, or use the statement’s summary totals if it prints them.
- Do the sumOpening + in − out. It should equal the closing balance exactly.
- Check the next statementIts opening balance should equal this closing balance.
The converter does all four for each statement, and the whole-year check does the last one across a whole set. If a statement uses a way of marking overdrawn balances that the converter doesn’t read correctly, the check will fail at those rows; please send a layout report so it can be added.
Where to find them on the statement
Most statements put both balances in a summary box near the top of the first page, often alongside the total money in and money out for the period. The opening balance is also the first line of the transaction list on many statements, and the closing balance the last.
Questions people ask
Is the opening balance included in money in?
No. It is the starting point. Only transactions in the period count as money in or out.
Why doesn’t this month’s opening balance match last month’s closing balance?
Usually there’s a statement in between, such as an interim statement, or the two statements are from different accounts.
What does OD mean after a balance?
Overdrawn: the account is below zero.