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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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