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Advanced troubleshooting for balance sheets out of balance

by Intuit • Image Alt Text •
Image Alt Text Updated 8/5/2026 01:43

Here are some ways to narrow down the transaction or transactions that are causing your balance sheet to go out of balance.

If you haven't already, you should try to Fix a balance sheet that's out of balance before you continue.

Run reports to find the transaction or transactions causing the problem

Important: Run the following reports one at a time to hunt down the transactions. Once you find the transactions that cause your balance sheet to go out of balance, you should re-date them to 20 years in the future. If that doesn't fix your balance sheet, try deleting and reentering them.

Step 1: Run a Customer Report

Step 2: Run a Vendor Report

Step 3: Run a Journal Report

Step 4: Run a report for Other transactions

Common issues that can throw a balance sheet out of balance

Determine if a certain type of transaction is putting the Balance Sheet out of balance. Some of the transactions you need to look for are:

An inventory return and discount on an invoice

Possible ScenarioRecommended Fix
  • You sold one or more inventory items.
  • Your customer returned one or more inventory items.
  • You have a discount item.
  1. Create a new invoice for the sale and the discount.
  2. Create a credit memo for the inventory return.
  3. Link the credit memo to the invoice in Receive Payments.

A discount entered at the customer level and applied at the job level

Possible ScenarioRecommended Fix
  • You have a customer with several jobs. You completed all of the jobs and invoiced the customer, including all the jobs on the invoice.
  • You received payment for the invoice, but your customer included a discount for Job A in the payment.
  • You recorded the payment against the invoice and entered the discount on the Discount/Credit tab.
You need to re-enter the payment and split it among the jobs, then enter the discount at the job the level to match the invoice.

A journal entry linked to a credit memo

Possible ScenarioRecommended Fix
You have an open Credit Memo and you entered an offsetting General Journal Entry (GJE), then linked it to the Credit Memo.
  1. Edit the Journal Entry.
  2. Move the A/R account to the source line, usually the first line of the GJE.
  3. Save the GJE and make sure it is still linked to the Credit Memo.

Unconventional inventory transactions

Possible ScenarioRecommended Fix
  • You have transactions that adversely affect inventory such as:
    • Transactions that drive your Quantity on Hand negative.
    • Transactions that change the Quantity on Hand for previously entered assemblies and cause the assemblies to be marked pending.
    • Washing Transactions with (+) and (-) units of the same item on the same price.
    • Transactions that use a damaged item, damaged customer, or damaged vendor.
  • You have a negative inventory that affects your Cash Basis Balance Sheet. You tried doing basic data damage troubleshooting on your company file however, when you enter inventory transactions again, your Balance Sheet becomes out of balance again.
  1. Correct transactions causing the Balance Sheet to be out of balance. Note that this may affect financial statements for previous periods.
  2. Start a new data file.

If the issue started after upgrading to a new version of QuickBooks, you can:

  1. Reinstall the old version.
  2. Restore a backup created before upgrading.
  3. Prepare the restored data file for upgrade.
  4. Upgrade your data file again into the new version.

If the transaction appears to be damaged, or is causing the imbalance without being one of the types of transactions listed above, either delete and recreate the transaction or click here for other recommended troubleshooting steps.

Check and resolve specific forms of data damage

If there are no transactions causing the Balance Sheet to be out of balance, you may have some data damage that the usual data damage troubleshooting cannot fix. The options listed below provide some specific forms of data damage troubleshooting you can do. These are rare and the steps to do them may be complex. Make sure you have created a backup before going through any of them.

Tips to keep your balance sheet in balance

Here are some things that can throw your balance sheet out of balance. Take extra care when dealing with these situations.

Inventory return and discount applied on an invoice

The invoice should include the sale and the discount. A credit memo needs to be created for the returned inventory. The credit memo is supposed to be linked to the invoice when you receive payment.

Journal entry linked to a credit memo

Be careful of linking journal entries to credit memos. If a journal entry causes the discrepancy, edit the journal entry and make sure A/R is the source on the first line. Check that the journal entry is still linked to the credit memo.

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