How to Fix QuickBooks Balance Sheet Out of Balance Error

A Balance Sheet should always show that total assets equal total liabilities. If they don’t match, follow these steps to correct the issue.

Tip: Balance Sheet reports can be detailed. Check with your bookkeeper or accountant before making changes. If you don’t have one, consider connecting with a professional.

Important: Some solutions may require editing transactions. Always create a backup of your company file before making changes.

Step 1: Run the report in accrual basis

1. Open the Reports menu.
2. Select Company & Financial, then choose Balance Sheet Summary.
3. Click Customize Report.
4. Go to the Display tab and select Accrual under Report Basis.
5. Select OK.
   • If the balance sheet is out of balance in accrual basis, rebuild your company file first.
   • If it is out of balance only on a cash basis, or if it remains out of balance after the rebuild, proceed to Step 2.

Note: Write down whether the balance sheet is out of balance in accrual-only or in both cash and accrual basis. You’ll need this information in the next steps.

Step 2: Find When the Balance Sheet Went Out of Balance

To locate the transaction causing the issue, identify the exact date your Balance Sheet became unbalanced.

1. Open the Reports menu.
2. Select Company & Financials, then choose Balance Sheet Summary.
3. Click Customize Report.
4. In the Display tab, set the Dates dropdown to All.
5. In the Report Basis section:
   • Select Accrual if the report is out of balance only in accrual basis.
   • Select Cash if it is out of balance in both cash and accrual basis.
6. In the Columns section, open Display columns by and select Year.
7. Select OK.
8. Compare Total Assets with Total Liabilities & Equity to find the year when the balance sheet first went out of balance.

After you identify the year, follow the same steps to narrow down the exact date.

• Repeat steps 1 through 6. This time, in Display columns by dropdown menu, choose Month.
• After you find the month, repeat steps 1 through 6 again and select Week.
• Finally, once you find the week, repeat the steps and choose a day. Now that you have the date when the report went out of balance, continue to Step 3.

Step 3: Locate the Transactions Causing the Imbalance

Use a Custom Transaction Detail report to find the transactions responsible for the error.

1. Open the Reports menu.
2. Select Custom Report, then choose Transaction Detail.
3. In the Modify Report window, go to the Report Date Range section.
   • Enter the date the balance sheet went out of balance in both the From and To fields.
4. In the Report Basis section:
   • Select Accrual if the issue appears only in the accrual basis.
   • Select Cash if it appears in both cash and accrual basis.
5. In the Columns section:
   • Clear the checkboxes for Account, Split, Clr, and Class.
   • Select the Amount and Paid Amount to simplify the report.
6. Select OK.

The ending balance in the Paid Amount column should equal the imbalance amount. Review the transactions listed and identify the entry or group of entries that add up to the difference.

Step 4: Re-date the transactions

1. Note the original dates of the problematic transactions.
2. Edit each transaction and temporarily change the date to a day 20 years in the future.
3. Save each transaction.
4. Refresh the report.
   • If you updated the correct transactions, the Paid Amount column should now show zero.
5. Find the transactions you re-dated and return them to their original dates.

Note: Re-dating forces the transactions to re-link, which can correct the imbalance.

Step 5: Delete and re-enter the transactions

If re-dating the transactions does not fix the imbalance:

1. Delete the problematic transaction or transactions.
2. Enter the transactions again with the correct details.
3. If the balance sheet is still out of balance after this step, proceed to Advanced Troubleshooting for Balance Sheet Issues.

Things to Prepare Before Fixing a Balance Sheet Out of Balance in QuickBooks

Before fixing the QuickBooks Balance Sheet Out of Balance error, ensure these prerequisites are in place:

• Access to QuickBooks: Confirm you’re using the correct version (QuickBooks Desktop or QuickBooks Online) and that you can open your company file.
• Backup Your Company File: Create a backup before making any changes to protect against data loss.
• Reconcile Accounts: Verify that all accounts, including bank and credit card accounts, are fully reconciled.
• Accurate Data Entry: Check that every transaction is recorded correctly and that no journal entries, vendor payments, or payroll transactions are missing or entered incorrectly.

How to Identify QuickBooks Balance Sheet Out-of-Balance Error?

To check whether your QuickBooks balance sheet is out of balance, follow these steps:

1. Run the Balance Sheet Report
   • In QuickBooks, go to Reports > Company & Financial > Balance Sheet Summary.
2. Compare the Totals
   • Look at Total Assets and Total Liabilities & Equity. If the amounts don’t match, the balance sheet is out of balance.
3. Check Accrual vs. Cash Basis
   • Use the Customize Report to run the balance sheet in both the accrual and Cash basis. If the imbalance appears only in one, it may point to the source of the problem.
4. Run a Trial Balance Report
   • Generate a Trial Balance Report to review all accounts in detail.
   • Identify any discrepancies in the accounts.

Frequently Asked Questions