When an error occurs in QuickBooks application, the consequences are always dire. Luckily, it is easy to assess the error and manage the accounting application.
QuickBooks Accounting software is a crucial tool for any business. It helps organizations to manage their accounts and pay their bills. But, QuickBooks (QB) is also a complex application and hence prone to errors, as in this case where the app shows an error – “QuickBooks Balance Sheet out of Balance”. Due to this error, the basic equation of “assets = liabilities + shareholder’s equity” fails to match with each other and QuickBooks data displays incorrect
Analysis of QuickBooks Balance Sheet out of Balance error
An analysis of the QBWin.log file indicates that the “Inventory Asset Account” experiences the error when the calculated balance and displayed balance for an account are not equal. The primary cause of Balance sheet error are:
Data Damage
The Company File gets damaged during the transaction entry. For example, the current fiscal year reports an out-of-balance transaction. Such damage can be fixed using the following methods - re-sort the list or rebuild the data for that fiscal year.
Incorrect Linking or Transaction entry
Data entries may appear to be entered correctly, but these may push the cash basis ‘out-of-balance’. These entries may include the following:
Any of these entries may offset other transactions. Such issues can be fixed only manually, and the process includes - locating, verifying and correcting individual entries.
Multiple-currency usage
The multi-currency issue is quite common amongst QuickBooks users. When the exchange rate of the payment does not match the exchange rate when the invoice was created, it results in a multi-currency issue. For such transactions, the gain or loss caused due to the difference in the exchange rate does not reflect in the balance-sheet resulting in out-of-balance-error.
This issue requires significant modification of the software and QuickBooks is in the process of resolving the multi-currency usage issue. Till that time, using a reliable Repair for QuickBooks software is the only solution to fix “Balance sheet out of Balance Error.”
Solutions to resolve QuickBooks Balance Sheet out of Balance error
Always check for the following before starting to resolve the QuickBooks error:
QuickBooks Balance Sheet out of balance error may occur due to changes in any of the following data types:
All Accounts professionals are apprehensive about sharing their organization’s data. And they are no programmers who can run developer’s code to fix the issue. In that case, the best way to resolve the problem is to check for all the alterations and resolve the issue manually by following the below-given instructions. However, manual procedures are lengthy and involve time and efforts. If time is not the constraint, then try the manual methods, else employ a software.
The solution to fix the transaction value and resolve Balance Sheet out of Balance error
Step 1. To fix the transaction manually, you need to determine the date when the Balance sheet shows the error
The process of “year is explained in detail. If the accounting data does not show results for that fiscal year, then repeat the same steps for “Month”, “Week” and “Day”, replacing the “Year” with these values.
Step 2. Locate the transaction causing the issue
Once the Year/Month/Week/Day for the transaction causing the problem is identified, the next step creates a “Custom Transaction Detail Report” to identify the transaction/s causing the “Balance Sheet out of balance error”.
Sometimes, there is difficulty finding the transaction which causes the discrepancy. Run the following Reports to check the transaction:
Customer Report
Vendor Report
Journal Report
Note: The Debit and Credit Totals won't match which confirms that you have the valid date when the Balance Sheet is out of balance. You need to find the specific transaction/s that show the debit total not matching with the credit total, or that one of its accounts is blank under the Account column. Open that transaction, then delete or recreate it as necessary.
Other transactions
Step 3. Determine the transaction which puts the Balance Sheet out of balance
A few transaction types are listed below. These transactions are further categorized into sub-categories based on scenarios. Check the scenarios and their recommended fix for each category:
Possible Scenario
Recommended Fix
Create a new invoice for the sale and the discount.
Create a credit memo for the inventory return.
Link the credit memo to the invoice in Receive Payments.
Possible Scenario
Recommended Fix
Re-enter the payment and break it amongst the jobs. Next, enter the discount at the job level to match the invoice.
Possible Scenario
Recommended Fix
Edit the Journal Entry (GJE)
Move the A/R account to the source line, say the first line of the GJE.
Save GJE entry and ensure that it is linked to the Credit Memo.
Possible Scenario
Recommended Fix
Transform the discount account to an income or expense account. If you are instructed by your accountant to use a Balance Sheet account and it is essential that you use Accrual basis reporting, then use the following workaround:
Offset the recorded discount to an expense account
Write a journal entry and move the discount from the “Expense Account” to the “Balance Sheet” account.
Possible Scenario
Recommended Fix
The unconventional inventory transactions are listed below:
Transactions that adversely affect inventory. Such operations are:
A negative inventory affects the Cash Basis Balance Sheet. While performing basic data damage troubleshooting on the company file, the Balance Sheet becomes out of balance when the inventory transactions are entered again.
Sometimes, correct transactions may cause the Balance Sheet to be out of balance, which may affect financial statements for previous periods also. In that case, create a new data file.
If the issue started after upgrading the QuickBooks to the new version :
If the transaction still appears to be damaged, or it is causing the imbalance, then recreate the transaction.
Possibly, by now the transaction causing the issue of “Balance Sheet out of balance error” is identified. If not then resolve the problem using the software.
Conclusion
For Finance professionals, fixing the “Balance Sheet out of balance error”, manually may sometimes prove quite gruelling and time-consuming. Approaching QuickBooks to troubleshoot the issue is not the right solution as it involves sharing the crucial data outside the organization. Also, QuickBooks data will remain unavailable until the issue resolves.
Trying to resolve the error with the help of a reliable QuickBooks repair software is the most realistic solution. The reason is software repairs the data and makes it available within no time. The data remains within the organization. As the software supports issues arising due to all the problems - Data Damage, Incorrect Linking or Transaction entry and Multiple-currency usage, it proves to be a feasible approach to resolve the error.
Source: Free Guest Posting Articles from ArticlesFactory.com