Truckers Helper Trucking Software - Business Software for Truckers by Truckers

BALANCING YOUR BALANCE SHEET

This article deals with finding errors in your accounting section that can affect your balance sheet. Before you start be sure you have latest version of the program (7.1.1 or above) and run Verify in the Income & Expense section and be sure all errors it finds are corrected. Once Verify runs clear (No Errors Found), you are ready to start working on your balance sheet. The first step is to insure that your balance sheet is balanced when you start. To do this run a balance sheet for the first day on which you have records in your Income & Expense section. This should be at the point where you have finished setting up your accounts and before you start entering any income or expenses. If this balance sheet does not balance the difference is your starting balance. To enter this you need to make an entry for OWNER EQUITY and enter whatever amount positive or negative that you are off. You will then get the word BALANCED at the end of the Balance Sheet report.

Balanced

If the balance sheet does not balance it will tell you that also and show you how much you are off.

FINDING DISCREPANCIES

The method for finding discrepancies is fairly straight forward. For our example lets assume it is now Dec 31, 2005 and you started your business on Jan 1, 2005. Regardless of the time period involved in your balance sheet you will follow this same basic proceedure.

So you run a balance sheet for 12/31/05 and it shows that you are out of balance. Next run a balance sheet thru 6/30/05 and see what that shows. It may show the same or a different balance off, or it may show that it is now balanced. If it shows balanced then the problem entry is after 6/30, if it shows that it is off there is a problem prior to 6/30. Let's assume that it is still off on 6/30. Split the difference and run a report for 3/31. Again, if it is off there is a problem prior to 3/31, if it is balanced, the problem is between 3/31 and 6/30.
Continue narrowing the date range until you have it down within a 7 day period and then go to FUNCTIONS and click on BALANCE SHEET ERRORS. You'll be asked for a start date and the program will then start running balance sheets from that date forward until it encounters an error. It will report the first date it finds where the balance sheet does not balance and tell you how much it is off on that date. Exit the report go to FIND/DATE and enter the date of the reported error. Now toggle through the entries and look for the amount you're off, remember this may be a single entry or could be a combination of entries. Read through the commen errors below before you start as the problem may be described there and help you in understanding what to look for.

COMMON ERRORS

In the process of adding the Balance ability to the balance sheet we found some discrepancies in the way we had been entering data in the past. These discrepancies have been corrected in the latest update, and if you have run Verify you will have corrected many of these entries already. Since Verify is setup to ignore any transactions with ADJUSTMENT in the Memo Field, some errors your will have to find manually.

DRIVER ADVANCES

When you are running a balance sheet for an earlier date and you have driver advances that have been given before the date of the report and settled after the date of the report you will be out of balance by the amount of the advance. The program sees a Driver Advance differently depending on whether it's been marked as OUTSTANDING or SETTLED. An Outstanding advance is considered current - a settled advance is ignored and the as it appears in the P&L on the date of the payroll. If you are going backwards looking for errors you need to be aware of this discrepancy in the report so you're not looking for a reported error that's actually a driver advance. If you have multiple advances for a given period the amount the Balance Sheet will be off will be the total of those advances which were settled AFTER the date of the Balance Sheet report you're running.

RETURNS ON CREDIT CARDS

One of the changes that has been made to the program is the way you enter returns or credits on a credit card. The old way of entering this was

Credit Card Adjustment
This method of entering these adjustments will create an error on your balance sheet, so we have changed it to use the same method that's used for entering cash account adjustments -

Credit Card Adjustment

You can find these transactions so you can correct them by using the Advanced Search feature. On the Income & Expense page click FUNCTIONS/ADVANCED SEARCH

Advanced Search

Then in the Advanced Search, select AMT and <> and enter 0 in the SEARCH PHRASE box. Click the arrow in the drop down box for TYPE IS and select PAYABLE from the list. Then do the same for PAID BY and select N/A from the list.

Advanced Search

Now click on Search to find the records. The program will then load all of the records that match that search criteria and you can toggle through them and correct them. If you don't remember what the original transaction was you can use the FIND function and search for the amount to find the original charge. Another problem which was create by the old version concerns payroll. If you do not use payroll this will not apply to you. For payroll users, if you did not have your payroll setup to expense the payroll tax at the time you ran the payroll, the program converted your old payroll data and created some adjusting entries for this. These adjustments are not being picked up by the balance sheet, so you will need to delete the adjustment the program made and correct the origianl Liability transactions which were done by payroll.
Again you will use the Advanced Search to find the transactions you need to correct. It is only necessary to correct the entries for this year (2005), so this time we will use the DATE as the seach criteria. Also check the > (greater than) button and enter 1/1/05 in the SEARCH PHRASE box. You will then select LIABILITY for the TYPE, and then select PYRL TAX EMPLYR from the CHG TO ACCT IS box.

Payroll Tax

The program will then return any matching records. The old record will look like -

Payroll Tax

You will need to change this record from a LIABILITY to an EXPENSE, and change the PAID BY from N/A to CHARGE. The PAYROLL TAXES charge account is used to pay this expense. So your transaction will now look like this -

Payroll Tax

The final change is to delete the adjusting entry that the program made to the Pyrl Tax Employer account. The easiest way to find this transaction is to look in the register for it. Click on REGISTER, then select the LIST OF ACCOUNTS tab. Toggle down the list and look for the PYRL TAX EMPLYR account. BE SURE YOU GET THE RIGHT ACCOUNT - you do not want the PYRL TAX EMPLOYER account, you want PYRL TAX EMPLYR which is a liability account. Click on that account to open it. The transaction you are looking for will be a NEGATIVE number, near the end of the listings for the account. When you find it, put your mouse in the TRANSACTION NUMBER field and RIGHT CLICK and the program will take you to that transaction. Click the DELETE button to delete the transation. If you are not sure whether it's the right transactions or not, run a Balance Sheet and follow the instructions above to track down the error and get the exact amount you need to correct. When all other errors have been corrected the amount the balance sheet is off will agree with the amount of that transaction.

CONCLUSION

Most of the problems that occur in getting your Balance Sheet to balance will be found in ADJUSTING type entries which you have made during the year. A good way to eliminate the need to spend hours finding and correcting bad entries is to run a balance sheet often - that way you'll be able to spot a possible problem early when there are only a few entries to check. If you get stuck, upload your database and we will see if we can help you get back on the right track. This service is free for Priority Service users or for any customers in their initail support period. There is a nominal fee for customers who no longer have free support. ACCOUNTING ANALYSIS and CORRECTION of errors is also available for a fee. Please contact support for details on this service.

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