The trial balance must always balance.
If it is imbalanced, it is usually due to an error that occurred when a journal was posted, or an error with your account configuration.
Correcting the imbalance will usually require correcting the individual journal entries as well as updating your configuration (if applicable).
Below is a step-by-step guide on how to identify and correct the imbalance.
The very first step is to check Brightpearl's data checker to see if any accounting entries are flagged as being imbalanced. The data checker can be found under Accounting > Data check.
One of the sections in the data checker lists all imbalanced journals:
If there are any journals where the debits and credits don't match, they'll be listed here. You can enter the journals and correct them.
Note that you may have to undo bank or VAT reconciliations or reopen earlier accounting periods in order to make the corrections.
If the data checker shows no results, or if you correct the journals flagged by the data checker but there's still an imbalance, carry on to the next step.
Identifying imbalanced journals using the trial balance
If the data checker displays no results, the issue is likely going to be due to transactions posting to account codes which do not exist in your system.
Normally this happens when a default account code has not been selected for one of the settings.
To quickly check whether this might be the case:
- Ensure every field under Settings > Company > Accounting: Accounts (nominal codes) has an account code selected against it
- Ensure every currency has an exchange rate gains/losses account code set against it
If you find one of the fields blank, or set to a number with no name, this is likely causing the problem. Creating the default account code for that field should rectify the problem. You can see a list of the default account codes here.
Once it's been created, you can post a journal to move the balance into the correct account code, then deactivate the code if it's no longer required. Remember to update your settings to use the correct account code.
If that does not solve the problem, you can identify the journals causing the issue as follows:
- Filter the trial balance's "to" date back until you find a date where the trial balance is balanced.
- Methodically set the "to" date forwards until you find a date where the trial balance is not balanced
- Set the "to" date to halfway between your two dates. Is the trial balance still unbalanced?
- If so, go back further until you find the point where it balances again.
- If it isn't, go forwards until you find the point where it becomes unbalanced.
- Continue going back and forth, narrowing your time period, until you find the day the trial balance became imbalanced.
- Filter the general ledger to show all entries made on that date. Export the report and look for a journal where the debits and credits don't match.
If there are only a few journal entries, you can correct them individually. However if there are several and you are unable to identify the code they are posting to, contact Brightpearl Support for further information.
To demonstrate this method, say filtering the trial balance to January 1st 2022 results in an imbalance.
If you then filter the trial balance back to January 1st 2021 and the trial balance is balanced, you know that the imbalance must have been introduced somewhere between January and December 2021.
To identify where, you need to narrow the time period. To do that, filter the trial balance to June 30th 2021.
Say the trial balance is still balanced. You now know that the imbalance was introduced between July 2021 and December 2022.
Filter the trial balance to September 30th 2021. Say the trial balance is now imbalanced. You now know the error was introduced between July and September.
Halve the time period again, this time filtering to August 15th 2021. If it's still imbalanced, you know the error was introduced between July 1st and August 15th.
Carry on halving the time period until you narrow it down to a day.