Balancing a balance sheet is a frustrating job, and even most people sometimes get stuck on it, especially when they cannot find the error or spot for correction. Although QuickBooks also offers you to prepare a balance sheet, users can sometimes get stuck on it. The app shows an error saying QuickBooks Balance Sheet Out Of Balance, and the users are left there wondering what went wrong. If you are also facing this issue or need to know what to do if you face the QuickBooks balance sheet out-of-balance issue, then this blog is for you. In this article, we will tell you everything you need to know about the error and will also provide some troubleshooting steps.
Read the complete article to learn more about the QuickBooks balance sheet out-of-balance issue.
What exactly is the QuickBooks Balance Sheet Out Of Balance issue?
A balance sheet is a financial statement that holds a company’s assets, liabilities, and shareholder equity at a specific point in time. A balanced balance sheet, however, is where the total number on the asset side and the amount on the liabilities and equity side are in perfect sync. However, in any case, If there is any difference in this amount, you may receive the QuickBooks balance sheet out of balance issue. Many reasons can trigger this QuickBooks balance sheet out of balance issue, which are discussed in the next part.
Simple steps to perform to know when you face the QuickBooks Balance Sheet Out Of Balance
To check if your balance sheet is unbalanced or if you are facing the QuickBooks balance sheet out of balance, check the steps given below:
- Go to QuickBooks and open Reports.
- Select the Company and Financial tab.
- Go to the Balance Sheet Summary option.
- Now, choose the Customize Report option.
- Hit on the Display button.
- Now, set the Report Basis to Cash.
- Make changes in the columns according to year, month, week, or day. You will face the QuickBooks balance sheet out of balance error if there is an issue with the sheet.
Why is your QuickBooks Balance Sheet Out Of Balance?
The main reason why you face the QuickBooks balance sheet out of balance is that your credit and debit side is not matching. However, there are other reasons that trigger the QuickBooks balance sheet out of balance are listed below:
- You have entered an inventory that has been returned by the customer.
- There might be a discount item on the invoice.
- You are using multiple currencies on the sheet.
- You have recorded a payment against the invoice or a discount on the Credit or Discount side.
- There is an Open Credit Memo present on the sheet. Then the user might have entered an offsetting General Journal Entry (GJE) and then must have linked it to the Credit Memo.
- You might have damaged your file data.
- Some of the transactions that you have entered or linked are not compatible.
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Points to remember before proceeding to the steps for troubleshooting QuickBooks balance sheet out of balance issue
Before moving ahead with the detailed troubleshooting methods, first perform these simple steps:
- Modify the total that you have reported year by year and then check if the balance sheet has got balanced.
- You can try to log out of QuickBooks and log in again to check if the QuickBooks balance sheet out of balance issue got resolved.
- Get the backup of your QuickBooks file before moving ahead with the troubleshooting steps.
- Sometimes, working in the multi-user mode can damage the company file and can cause the sheet to get unbalanced. Try to fix the data damage by using the main system from where the file is hosted.
- Try to verify and rebuild the QBWIN logs before proceeding.
Troubleshooting Methods if You get QuickBooks Balance Sheet Out Of Balance issue.
The first step toward troubleshooting the QuickBooks balance sheet out of balance issue is to determine which transactions are responsible for the error. So first, sort the transactions according to month and date.
Method 1: Determine the transaction responsible for the Quickbooks Balance Sheet Out Of Balance issue
Determining the transaction responsible for the QuickBooks balance sheet out of balance requires a multi-step procedure, with each step holding a special significance. Perform each step one by one carefully.
Step 1: Steps to determine the Year/Months/Dates for which Quickbooks Balance Sheet Out Of Balance pops up
Steps to Locate the year:
- From the Reports menu, select Company & Financial, then Balance Sheet Summary.
- Click on the Customize Report.
- Now, navigate to the Display Tab.
- Next, from the drop-down menu, click on Select All from the menu.
- Then choose Year from the Display columns and hit OK.
- Now, Compare both the Total Assets and Total Liabilities to locate the year for which the QuickBooks balance sheet is out of balance.
Steps to Locate the month:
- Once you have located the year causing the issue, put the year in the Form and the Field.
- Now, select the Right month from the Display menu and then press the OK button.
- To locate the month, compare both the entities: The Total Assets and the Total Liabilities.
Steps to Locate the Week:
- To narrow down your search to weeks, put the Month in the Form and the Field.
- Now, select the Week from the Display menu and then press the OK button.
- To locate the issue, compare both the entities that are Total Assets and the Total Liabilities.
Steps to Locate the Day:
- In the From and To fields, enter the week that was found to be out of balance.
- In the Display columns, you need to select Day.
- Click OK.
- Compare the Total Assets and Total Liabilities to find the day the balance sheet goes out of balance.
Read Also- How to Record Opening Balance in QuickBooks
Step 2: Steps to determine the transaction responsible for the Quickbooks Balance Sheet Out Of Balance issue
- Go to the Reports menu, and choose Custom Transaction Detail Report.
- It will automatically open the Modify Report window. If it doesn’t open, click on the Customize Report, then go to the Display tab.
- Under Report Date Range, type the date for which you are facing the QuickBooks balance sheet out of balance issue in the From and To boxes.
- Next, you need to choose either Cash or Accrual, whichever is out of balance under the Report basis.
- In the Columns box, uncheck the boxes present in front of Account, Split, CLR, and Class.
- The previous step would make it easier for you to read the report.
- If you want to view a cash-basis report, click on the Paid Amount column, select it and Click OK.
- The report will show an ending balance which will be the amount that is out of balance.
- Look for the Amount (on an Accrual report) or the Paid Amount (on a Cash report) column for a transaction that equals the ending balance of the report.
- If you find only a single transaction that matches the ending balance, you need to proceed to step no 3.
However, if you can not find the transaction(s), you will need to follow the other methods described below.
Step 3: Check and Manually Resolve Specific Data Damage that caused the Quickbooks Balance Sheet Out Of Balance issue
If some specific data is causing the QuickBooks Balance Sheet Out of Balance, then you need to try specific steps to fix the damage as usual; data damage troubleshooting steps do not fix it. We have provided below some specific solutions for such data damage. Make sure to create a backup for your file before moving ahead.
A. When the B/S Summary is out of balance, but the B/S Detail is in balance or vice versa.
You need to identify the damaged account and merge it with a new one.
- If both of your reports have the same basis and same date range, then there is some damage to the account list.
- You would need to determine the problem account by creating the problem by comparing the reports and then find out the account that has a different balance on both reports.
- At last, you need to merge the damaged account into a new one.
B. When the accrual B/S is in balance for All Dates but out of balance for any other date range.
You would be required to find and repair the damaged transactions.
- Start with backing up your company data file.
- Go to the QuickBooks menu bar and then to the Lists, and then select the Charts of Accounts.
- Click right on the Uncategorized Expense accounts and then select the QuickReport option.
- Select the Modify Report option.
- Now, from the drop-down menu, click the Report Date Range and then select All.
- Now, click on the Filter tab.
- From the Filter box, scroll down and then choose the Posting Status.
- Now, select Either and then click OK.
- Next, search for the transaction with an amount but no item or account linked to it.
- Repair all the transactions that you find like this.
- Repeat all ten steps until all the transactions are repaired and verified.
- Lastly, rerun the Balance sheet report.
C. When the accrual B/S is out of balance, but the cash B/S is in balance.
You have to identify the damaged income or expense accounts that have a balance but no transactions linked to them and then merge them into a new account.
- Start with determining the difference between assets and liabilities.
- Now, go to the QuickBooks menu bar and then select the Report options, and tap on the Company and Financial.
- Now, choose the Balance Sheet Standard.
- Then, click on the Modify Report and the All Dates for the date range option and then Accrual for the basis option.
- Note the difference between Assets and Liabilities & Equities.
- Next, you need to locate the damaged account and Export your Charts of Accounts to the desktop.
- Now open your COA file in Microsoft Excel.
- Now, you need to highlight the first two rows of your sheet and then delete them. (You do not need header rows)
- Again, highlight Column G and higher to delete them. (These columns are not needed for this purpose. )
- The Row 1 in Column F is OBAMOUNT.
- Next, click on the cell above Row Header 1 and then on the left of Column Header A to highlight the entire spreadsheet.
- Next, you need to sort the entire sheet by column F.
- Then find the row for which the Column F amount is the amount from Steps 3c1 to 4.
- Note down the name of the account and fix the damaged account.
- Now, go to QuickBooks and run QuickReport for All Dates on the account noted in Step 3B-8 and above.
- If you find no transactions, then this is the problem account.
- You will not find any balance if there are no transactions.
- Now, create a check for one cent ($0.01) to this account.
- Next, run the basic data damage troubleshooting steps in the company data file.
- Now, double-click QuickZoom on the account and delete the check you created in the previous step.
- Lastly, run the accrual basis balance sheet to verify that it is in the balance.
D. When you have Condensed your data, but your balance sheet is out of balance, and the JEs show amounts without associated accounts.
This issue generally appears if you have changed the associated account on a payroll item after it was used on a paycheck and then run Condense.
You would need to correct the affected journal entries.
- You need to restore your company data file from the backup that you created before condensing the data.
- Now, create a report with the Transactions List by Date. For this, choose Reports, then Accountant & Taxes, and then Transactions List by Date.
- Filter the report for the Transactions Type: Journal and All Dates.
- Next, scroll down to find any Journal Entries that show an amount without an associated account.
- Now, double-click the report entry and open the Make General Journal Entries tab.
- Next, to print the entry for reference purposes before deleting it, click on the Print option at the top corner of the window.
- Now, from the Edit menu, you need to choose the Delete General Journal option.
- Again, go to the Edit menu and choose the New General Journal option, and then re-record the journal entry that you had just deleted in the previous step and enter the correct account.
- Lastly, Click Save and New and again repeat the same steps (from 5 to 9) for all the affected Journal Entries.
E. If only one column setting (e.g., Total Only) shows out of balance and the other column settings (e.g., by Year) are balanced.
Sometimes your report gets balanced when you set columns to display Total only but does not get balanced when you set the columns to display by Year. This results when one or more accounts are damaged. You need to identify the damaged accounts and merge them into a new one.
- First, determine the data that is out of balance.
- Now, click on the Report menu and then choose Company & Financial, then click on the Balance Sheet Summary option.
- Now, click on the Dates drop-down menu and then choose All.
- Next, hit OK to display the balance sheet.
- Next, from the Columns drop-down menu, select the Total only and check if TOTAL ASSETS match TOTAL LIABILITIES & EQUITY.
- If they do not match in at least one column, note down the column heading of the first one where the totals do not match and continue with Step 2.
- However, if the total matches, continue with the next steps.
- Now click the Columns drop-down menu and then select Year and check if the TOTAL ASSETS match TOTAL LIABILITIES & EQUITY for all columns on the report.
- If it does not match in at least one column, then note the heading of the first one and then continue with Step 2.
- But, If the totals match in every column, then you have to repeat these steps.
- Now, progressively select the smaller time increments in the Columns field.
- Stop when you find the column where the TOTAL ASSETS do not match TOTAL LIABILITIES & EQUITY do not match. Note down the heading of the first instance and then continue with Step 2.
- Identify the damaged account and Merge them with the new ones.
F. If the B/S is out of balance on both Accrual and Cash bases.
You need to identify and repair the transactions that do not have any account assigned.
- First, custom the Transaction Detail report.
- Set Dates to All.
- Now, set the Basis option to Cash.
- Next, Set the Total to the Account List.
- Add the Item column and click OK.
Scroll down to the bottom of the report. Check if the last group of the transactions has the heading No account and the Account column is blank; then, these transactions have no accounts linked to them. Then you need to follow this:
- First, open the Edit Item window for the Item.
- Then change the Account and then click OK.
- Again open the Edit Item window.
- Now, change the Account back to the original account and then click OK.
- Repeat steps 1 to 4 for all the transactions on the above report that do not have any account linked.
If you can not find the transaction(s) in Step 2 that caused the Quickbooks Balance Sheet Out Of Balance, you will need to follow the different reports described below.
Run the Customer Report to resolve the QuickBooks Balance Sheet Out Of Balance issue
- First, click the Reports menu and then click Custom Reports, and then Transaction Details.
- The Modify Report window will pop up automatically. If it does not open, click the Customize Report.
- Next, Go to the Display tab and set the Report Basis to either Cash or Accrual, whichever is out of balance.
- Now, set the From and To date to the days the balance sheet goes out of balance.
- Next, set the Total by to Customer option.
- Then go to the Filter tab, and on the Filter list, choose the Transaction Type.
- Now, on the Filter detail information, you have to select Multiple Transactions. After that, choose the Invoice, Credit Memo, and Payment options, and then click OK.
If you find the total same as the amount by which the QuickBooks balance sheet out of balance issue occurred for this date, you need to find the customer that has a non-zero (positive or negative) sub-total. This customer has damaged transactions which are causing the QuickBooks balance sheet out of balance issue.
If you are getting the total as non-zero and not the amount by which the QuickBooks balance sheet out of balance issue occurred for this date: You will have to add the other transactions to the Transaction Type filter. You may also have to add the Journal Entries and sometimes also Checks.
Run the Vendor Report to resolve the QuickBooks Balance Sheet Out Of Balance issue
- Go to the Reports menu, and click Custom Reports then to Transaction Detail.
- The Modify Window will open directly. However, if it does not, click on the Customize Report.
- Next, move to the Display Tab and then set the Report Basis to either Cash or Accrual, whichever you find is out of balance.
- Next, you have to set the From, and To date for the day the balance sheet got unbalanced.
- Now, set the Total to the Vendor option.
- Go to the Filter tab and select the Transaction Type on the Filter list.
- Next, select Multiple Transactions on the Filter detail information. Then choose the Bill, Bill Credit, and Bill Payment and click OK.
If the Total equals the amount by which the QuickBooks balance sheet out of balance issue occurred for this date, then you need to find the vendor who has a non-zero sub-total. This vendor has damaged the transactions.
However, if the Total is not the amount by which the QuickBooks balance sheet out of balance issue occurred for this date, you will be required to add other transactions to the Transaction Type Filter, like Journal Entries.
Run the Journal Report to resolve the QuickBooks Balance Sheet Out Of Balance issue
- Start with the Report menu and then choose Accountant and Taxes, and then Journal.
- Click on the Customize Report option and then go to the Display Tab.
- Now, set the Report Basis to either Cash or Accrual, whichever is causing the QuickBooks balance sheet out of balance issue.
- Next, set the From and To date as per the date the balance sheet goes out of balance and hit OK.
Here you will notice that the Debit and Credit Totals will not match. This confirms that you have identified the right date for which the QuickBooks balance sheet out of balance issue arose. Now, you have to find the specific transactions for which the debit total does not equal the credit total, or one of its accounts is blank under the Account column. Next, just pull up that transaction and accordingly delete or recreate it to resolve the QuickBooks balance sheet out of balance issue.
Run the Report for Other Transactions to resolve the QuickBooks Balance Sheet Out Of Balance issue
- Start by navigating to the Reports menu and clicking the Custom Report tab, then tap on Transaction Detail.
- A Modify Report window will automatically pop up on your screen. If it doesn’t open, click on the Customize Report option.
- Next, go to the Display tab and set the Report Basis to Cash.
- From the Dates drop-down menu, click All.
- Set the Total to Account List.
- Lastly, add the Item column ad click OK.
- Next, you need to scroll down to the bottom of the report and check if the last group of the transactions has No account as a heading and a blank Account column. Then, these are the transactions that do not have any account linked to them. Follow the given steps to resolve the QuickBooks balance sheet out of balance issue.
- Go to the Lists menu and click on the Item List.
- Now, look in the List window and click right on the item and choose the Edit Item option.
- Change the Account and then hit the OK button.
- Next, open the Edit Item window again.
- Now change the Account back to the original account and hit OK.
- Repeat steps 1 to 4 for each transaction in the above report that does not have an account.
- Lastly, you have to determine if a certain type of transaction is putting the QuickBooks Balance Sheet out of balance on Cash Basis.
Some of the transactions you need to look for are
- If an inventory and discount are applied to an invoice, then
- You have sold one more inventory item.
- Your customer returned one or more inventory items.
- There is a discount item.
- You have to create a new invoice for the sale and the discount.
- You can create a credit memo for the inventory return.
- You need to link the credit memo to the invoice in Receive Payments.
- If a Journal entry is linked to a credit memo, then
You have an open Credit Memo and have also linked an offsetting General Journal Entry to it.
- You need to edit the journal entry.
- You have to move the A/R account to the source line which is usually the first line of the GJE.
- You have to save the JGE and make sure it is still linked to the Credit Memo.
In this blog, we have given you a detailed guide about the QuickBooks balance sheet out of balance. However, if you do not find it easy to follow the given steps. You can troubleshoot the QuickBooks Balance Sheet Out Of Balance error by manually deleting and re-entering the transactions. This would end the need to find and modify the transactions. However, if you need any kind of technical help, you can contact our QuickBooks Support Experts and can get your issues resolved.