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Why won't my QuickBooks balance sheet reconcile?

A balance sheet that won’t balance usually traces back to a handful of common problems. The fix depends on identifying which one you’re dealing with.

Opening Balance Equity is the first place to look. When QuickBooks creates certain accounts or when bank connections are set up, it posts offsetting entries to Opening Balance Equity. This account should eventually be zeroed out by journaling those amounts to the correct equity accounts. If your Opening Balance Equity shows a balance other than zero, that’s often the culprit. Check when those entries were created and what accounts they relate to.

Deleted or modified reconciled transactions are another frequent cause. If someone deletes a transaction that was already reconciled, or changes the amount after reconciliation, QuickBooks doesn’t automatically flag the problem. Your reconciliation history might show everything as cleared, but the underlying numbers no longer match. Run an Audit Log report filtered by deleted transactions to see if this happened.

Duplicate entries from bank feeds create discrepancies that can be hard to spot. This happens when someone manually enters a transaction and then the bank feed imports the same transaction again. Both hit the books, so your bank account balance looks right when you reconcile, but other accounts are doubled up. Look for transactions on the same date for the same amount hitting the same vendor or customer.

Journal entries with errors cause balance sheet problems when they don’t truly balance or when they hit the wrong account types. A journal entry might look balanced in the entry screen but if an account was misclassified as an expense when it should be a liability, the balance sheet suffers. Review your journal entries, especially any made by people unfamiliar with QuickBooks setup conventions.

Undeposited Funds is worth checking if you record customer payments. Payments go to Undeposited Funds first, then get grouped into bank deposits. If payments are recorded but never deposited, you’ll have an inflated balance in Undeposited Funds that doesn’t match reality. Open that account and look for old payments sitting there.

To investigate, run a Balance Sheet Detail report for the period in question. Look at each account balance and drill down into the transactions. The account that’s off will usually become obvious when you see the individual transactions that make up the balance.

If you can’t find the problem or the discrepancy goes back multiple periods, it might be faster to have a QuickBooks bookkeeper in Santa Fe review your file. Untangling months or years of accumulated errors takes time, and fixing things incorrectly can make it worse. Sometimes a fresh set of eyes catches what you’ve been staring past.

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More Questions

How do I find a bookkeeper familiar with New Mexico taxes?

Look for someone who regularly files GRT returns for New Mexico clients. Ask about their experience with location codes, combined reporting, and the state's unique tax structure. Local referrals from CPAs or other business owners are your best starting point.

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How do I handle progress billing for construction projects?

Set up billing milestones tied to project phases or completion percentages in your contract. Invoice as each milestone is reached, track retainage separately, and record everything in your accounting system so you know exactly where each project stands financially.

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Start with a dedicated business bank account and credit card. Capture receipts immediately, categorize transactions weekly, and connect everything to accounting software that pulls in your bank feeds automatically.

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Structure customer payments so money comes in before you need to pay it out. Require deposits that cover materials, set up progress payments tied to milestones, and negotiate supplier terms that give you breathing room between expenses and income.

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Set up separate income and cost of goods sold accounts for each revenue stream. Consignment sales and secondary market purchases have different accounting treatment because of how you acquire the work and what you owe when it sells.

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Can someone help me set up QuickBooks correctly?

Yes, QuickBooks ProAdvisors and many bookkeepers offer setup services to configure the software for your specific business. Proper setup includes a customized chart of accounts, bank connections, correct settings, and training on day-to-day use.

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Focus Point Accounting provides bookkeeping and accounting services for small businesses across Santa Fe and Northern New Mexico. Led by Stephen Vigil, a Certified Internal Auditor with 20+ years of experience. We bring an auditor's precision to your financial records.

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