When an error occurs in QuickBooks application, the consequences are always dire. For eng. Balance Sheet out of balance error. 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 entries, along with an error message.
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:
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.
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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:
- Use of credit memos for returned inventories
- Discounts for jobs
- General journal entries
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.
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 Stellar Repair for QuickBooks software is the only solution to fix the “Balance sheet out of Balance Error.”
Solutions to resolve Balance sheet out of Balance Quickbooks Error
Always check for the following before starting to resolve the QuickBooks error:
- Backup QuickBooks data – QuickBooks involves processing and storing of crucial data. Hence all data must be backed up before beginning to fix the error.
- Troubleshoot on server computer if multiple users use QuickBooks data. The reason is if changes are made on the local machine, these will not reflect on a central location, which may not help resolve the error.
- Verify if this is a recurring error. Then the issue may be that the display is slow in refreshing the report or the problem is with the default date. Logout of QuickBooks file and log in again and change the default date.
- Use the basic troubleshooting for data damage. Many times, issues are resolved with the help of simple steps like “Run the rebuild and verify data utilities”. Next, reopen the balance sheet and check the balances. If the problem persists, resolve the issue of “QuickBooks Balance Sheet out of Balance error” with the help of QuickBooks repair tool.
QuickBooks Balance Sheet out of balance error may occur due to changes in any of the following data types:
- Customer Report
- Vendor Report
- Journal Report
- Other Transactions
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.
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
- In the QuickBooks application, go to Reports menu, then select Company & Financial à Balance Sheet Summary.
- Select Customize Report, available in the upper left of the Summary Balance Sheet window
- Set the Report basis to Cash
- Narrow down the search for Date Range and change the columns to determine when the Balance Sheet show out of balance
- As it involves a manual transaction, then the steps should be performed for all of the following
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.
- Go to Dates drop-down and select All
- From the display column of drop-down, select Year
- Click OK.
- Compare the Total Assets and Total Liabilities to find the year the Balance Sheet goes out of balance.
- Proceed to Month (followed by “Week” and “Day”, if the results are not satisfactory)
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”.
- Click “Reports” from the menu, and select Custom Report > Transaction Detail.
- The “Modify Report” window opens. If the window doesn’t open, select Customize Report and click “Display” tab
- Under “Report Date Range”, in the “From and To” fields, type the “date” when the Balance Sheet went out of balance.
- For example: From = 4/14/00 To = 4/14/00.
- Set the Report Basis to Accrual
- Under “Columns”, uncheck the following – “Account”, “Split”, “Clr”, and “Class” (if Class is present), and check “Amount”. This makes the report more comfortable to read.
- Click “OK”. The ending balance on this report should be out of balance amount.
- Check the Amount column for a transaction that equals the ending balance of the report.
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
- Other Transactions
For Finance professionals, fixing the “Balance Sheet out of balance error”, manually may sometimes prove quite grueling 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 will resolve balance sheet out of balance QuickBooks 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.
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