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Balance sheet is out of balance

One of the most common reasons that balance sheets do not balance is that accounts are assigned to the wrong category or to no category at all.

The balance sheet report uses reporting categories to determine where each account is included. If an account hasn't been given a category, it will not flow through to the balance sheet. Or if the account has been assigned an incorrect category, it might appear within an unintended section of the report, which can also cause an imbalance.

Common cause

If your company was set up with a QuickStart template, your company uses categories, and you probably use the balance sheet report that was part of the QuickStart.

If you have not assigned a category to an account, it does not flow through to the balance sheet. Transactions from this account will not appear in the report at all.
If you assigned an incorrect category to the account, that account could appear in an incorrect or unexpected section of the report. In this case, the result will not be in balance.

Best practices for reports

Here are some recommended best practices:

Assign a category to all accounts. Verify that the category assignment is correct.
Don't assign the Revenue category to accounts that will be used on the balance sheet report. The Revenue category doesn't flow into Intacct standard reporting.
Create a Smart Rule that requires that all accounts selected for the report have a category.

Assign or edit a category assignment

Update an account if it’s been assigned an incorrect category, or does not have an assignment of a category altogether. This ensures that the financial report gets accurate data.

To add or edit an assignment for an account:

Go to General Ledger > All > General Ledger Accounts.
Find the account.
Select Edit at the end of the row.
Select the new or different category from the Reporting category dropdown menu.
Select Save.

Go to General Ledger > All > General Ledger Accounts.
Find the account and select Edit.
Select the new or different category from the Reporting category dropdown menu.
Select Save.

The Interest expense category is configured to Credit normal, even though sometimes it's assumed to be Debit normal. This is intentional. The interest expense account has a debit balance as the default, but in reporting it appears as a negative amount, offsetting the interest income.

Balance sheet report settings

If you're using the QuickStart report for the balance sheet, then Assets, Liability, and Equity are account groups that are based on categories. To help ensure that you're using the right settings in your balance sheet report, use the settings in the following table.

Recommended balance sheet settings
Item	Setting
Account Groups Calculated Amount	End of Period
Net Income (Loss) account group	For Period, Credit Balance
Assets	Debit Balance
Liabilities	Credit Balance
Equity	Credit Balance

Retained earnings account

Do not post directly to your retained earnings account. Instead, create a separate retained earnings adjustment account to use for manual retained earnings adjustment entries as needed. Categorize this adjustment account as retained earnings for reporting rollup.

Because the virtual close at the end of any user-defined period updates your retained earnings balance, the Close books function does not cause a retained earnings roll forward.

Nor does it zero out income and expense accounts for the period being closed. Therefore, you can report across any time period and see the revenue and expense balances based on the report setup—over time or within the retained earnings account.

Use a custom view

To help troubleshoot your category assignments, create a custom view to find any unassigned accounts. To find accounts without a category associated, a custom view can be generated within the Accounts list. For more about creating the custom view, see Review category assignments.