Cash and cash flow - OCROpening and closing balance

Opening balance

The opening balance is the amount of money a business starts with at the beginning of the reporting period, usually the first day of the month:

opening balance = closing balance of the previous period

If there is no previous period, then the opening balance will be zero.

For example:

closing balance for January = £5,650

therefore

opening balance for February = £5,650

Closing balance

The closing balance is the amount of money the business has at the end of the reporting period, usually the last day of the month:

closing balance = net cash flow + opening balance

For example:

net cash flow = £2,550

opening balance = £5,650

£2,550 + £5,650 = £8,200

therefore

closing balance = £8,200