How To Triage Your Balance Sheet in QuickBooks

Fix your data before your bookkeeping gets ruined

fix issues in quickbooks file

QuickBooks is powerful accounting software that provides robust reporting and insights into the financial health of your company's books. Of course, this rests on the all-important premise that data must be input with complete accuracy to ensure that accounts add up correctly. Input errors, rounding mistakes, and incomplete ledgers can all cause accounts to add up incorrectly and thus reduce the accuracy of your QuickBooks statements.

If your books are not reconciling, you should understand that Intuit includes a suite of tools to help business owners find the source of an accounting error and address it effectively. Repairing these problems immediately can help ensure that your books are accurate and up-to-date and your reports can be trusted.

1. Run a Trial Balance

For your balance sheets to be accurate, the total sum of your reported assets must equal gross liabilities plus total equity. When these accounts do not add up to exactly the same value, they are considered unbalanced for accounting purposes. QuickBooks can offer immediate feedback on whether your accounts are balanced by running a trial balance, which provides a rapid overview of the net value of any accounts that have either a positive or negative balance. For the purpose of a trial balance, any account that has a balance of zero is ignored. Output from a QuickBooks trial balance can simplify identifying which accounts might have outstanding errors.

After reviewing this information, write down each account that you believe might have problem and the amount by which that account appears to be inaccurate.

2. Export Data

Using information from your trial balance, identify a list of accounts that you think might need to be cleaned up. At the top of the QuickBooks window, click on File -> Utilities -> Export -> Lists of IIF Files.

This should bring up a window titled "Export" and a list of check boxes. Tick the check box that says "Chart of Accounts" at the top of the list. Once you have selected this item, click "OK" on the right side of the window. QuickBooks should then create and export an IIF file that can be opened in Microsoft Excel. It is often a good idea to back up this file by saving it again as an XLS. Converting the IIF to an XLS file will also prevent potential issues with formatting or protected mode.

3. Identify the Problematic Account

The file created in the previous step can be used to review a ledger of each account that you identified in the first step. Start by deleting the first two rows in the data set to make the information easier to manage and sort. Take a look at columns B and F, which contain the name and amount, respectively, for each transaction in your books. To make this data more useful, sort the items in column F from low to high. By either scrolling through the sorted list of transactions or simply using Excel's search function, try to find the values that you identified as inaccurate in the first step. If you find one of the values, ensure that you check your work by returning to QuickBooks and running a QuickReport on the chart of accounts.

4. Use the Rebuild Data Utility

With your problematic transactions identified, you can now move on to repairing your damaged balance sheet to ensure greater accuracy of future reports. The simplest way to repair a balance sheet in many cases is to use the rebuild data utility that comes with QuickBooks. This feature is designed to automatically find and repair faulty transactions in an account by comparing it with data from the general balance sheet. You can run the rebuild data utility by clicking File -> Utilities -> Rebuild Data. If you have identified the specific problem, you can also manually repair the faulty transaction by going into the QuickBooks ledger. However, make sure that you check your work to prevent introducing a new mistake that could exasperate the current problem.

5. Prevent Future Problems

While the rebuild data utility and manual review can usually uncover the source of unbalanced books, finding the problem itself can be a long and frustrating process in rare instances.

Business owners with extensive books may need to look through thousands of transactions to find one or more entries that might be erroneous. It is important, therefore, that strategies are developed to prevent books from becoming unbalanced again in the future. You should start by reviewing your ledger input process to ensure that you and your associates are adding transactions to the general ledger in the correct way. For example, many people who are not accountants often confuse debits and credits. Consider investing in training or working with a professional bookkeeper if you find yourself wasting valuable hours reconciling accounts on a routine basis.