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:
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:
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 Repair for QuickBooks software is the only solution to fix “Balance sheet out of Balance Error.”