Tips and Tricks: How To Correct Unbalanced General Ledger

There are many reasons as to why the general ledger can be out of balance. A power glitch or failure that interrupts or stops the posting process is the common cause of a general ledger going out of balance. If you encounter this situation, you must determine when it went out of balance, which account or accounts are impacted and when you know these variables it can be corrected. Below are tips and tricks you can use to determine if your general ledger is in balanced, and if not, how to correct it.

How To Check If The General Ledger Is Balanced

Run the Trial Balance for the current month end.

  1. Click File, Print Reports, General Ledger.
  2. Double click Trial balance.
  3. Fiscal period ending should default with current month end date.
  4. Leave Report consolidation unchecked.
  5. Click OK.

Whether you default the report to the screen or printer, go to the last page of the trial balance. You will now see the **TOTAL** line.  

You will need to compare the following;

1. Opening Balance; Debit column and Credit column totals are the same. These totals are the fiscal period ending before the month you selected. Circled in green in the above example.

2. Change This Period; Debit column and Credit column totals are the same. These totals are the journal entries completed in the current fiscal period selected. Circled in yellow in the above example.

3. Closing Balance; Debit column and Credit column totals are the same. These totals are the sum of the opening balance and change this period for current fiscal period selected. Circled in red in the above example.

    If all comparisons are correct, your general ledger is balanced. If they are not, then you need to find which month that the opening balance totals are balanced but the Change This Period totals are not. Now run the Trial Balance report back each month to determine which month it went out of balance.

    Fixing Unbalanced General Ledger

    Now that you have determined which month went out of balance, now you need to correct this and put your general ledger back in balanced. 

    The key points to correcting an out of balance issues are;

    1. Is the data reporting correct on the report?
    2. When did the out of balance occur?
    3. Where is the out of balance occurring?
    4. How to correct the out of balance issue.

    So let’s put on our detective hats and start investigating is, when, where and how. 

    Step 1: Is the data reporting correctly?

    Before we start searching for when the general ledger went out of balance we went out, we should stop and make sure the data is reporting correctly.  To do this;

    1. Have everyone exit Sage BusinessVision and Backup the company’s data.
    2. Log into Sage BusinessVision and run a Reorganize/Allocate of the GL Transactions.
    1. Click File, Reorganize Files.
    2. Click OK to acknowledge Data File Reorganization message.
    3. Click G/L Transactions.
    4. Click Reallocate Transaction data to new fiscal periods.
    5. Click Reorganize Icon.
    6. Click Yes to Confirm Reorganize to proceed.
    • Run Trial Balance again for current date to confirm Totals are still out of balance.

    The Reorganize/Allocate function will update the GL-Chart balance for each accounts base on the transactions that exists in the General Ledger. If the trial balance report is in balance after the reorganize/allocate this means you just corrected the issue and saved yourself quite a bit of time. On the other hand, if your trial balance is still out after the reorganize/allocate of the General Ledger then you need to determine when and where.

    Step 2: Determine when and where the unbalance occurred

    When journal entries are posted to the General Ledger, the total of the debits must equal the total of the credits. But as mentioned before a power glitch or failure can interrupt this process and as a result the journal entry may be posted as an out of balanced (one sided) journal entry; this means, not all of the accounts were posted too. So when viewing the journal entry the debits and credit do not equal.  

    To see if there are unbalanced journal entries that are causing the General Ledger to be out of balance, we can run the General Ledger Unbalanced Report. To do this you must;

    1. Log into Sage BusinessVision as Unbalanced User. (See knowledgeable article on how Finding and Fixing Unbalanced General Ledger Transactions: http://bit.ly/1oH4w3p)
    2. Click File, Print Reports, General Ledger.
    3. Double click Unbalanced G/L Transactions.

    The unbalanced General Ledger Transaction Journal report starts to run.  This report will list all journal entries that are unbalanced. Be advise that if you have made one-sided journal entries in the past to correct unbalanced journal entries, these corrections will also be included in this report.

    If there are unbalanced journal entries that need to be corrected, please go to Step 3

    If there is none, you must run the Trial Balance Report back until you find out where the out of balance is coming from. You are looking for the Opening Balances to be in balance but the Change This Period to be out of balance. This will give the month an error has occurred in. You will then have to go through the journal entries for that month to see which ones were posted as unbalanced. When you have determined this proceed to Step 3.

    In some cases the Opening Balances on the first month of the Last Year is out and Change this Period is in balanced.  This means that the error occurred in a previous year that has been closed. You can go through historical reports to see if you can locate why and proceed to Step 3.

    Step 3: Fixing out of Balance General Ledger

    There are two way to correct an unbalanced journal entry: 

    1. Post an unbalanced journal entry through General Ledger for the account(s) and amount(s) that are missing from the original journal entry. **Note** make sure you use the date of the original journal entry because you want it to update the same accounting month.
    2. Post an unbalanced journal entry through General Ledger to reverse the original journal entry. Then do another journal entry for the full journal entry that should have been posted originally. **Note ** make sure you use the date of the original journal entry because you want it to update the same accounting month.

    Once all corrections are made, run the Trial Balance again to see if it in balanced.

    If there are no unbalanced journal entries but the month is still out of balance, this could be a damaged journal entry (it is balanced but no reporting correctly) or an opening balance is not reporting correct for just that month. To fix this: 

    1. Have everyone log out of the Sage BusinessVision and make sure you have a good backup of your data before proceeding.
    2. Log into Sage BusinessVision as of the first day of the month that went out of balance.
    3. Run a Reorganize/Allocate of the GL Transactions.
    1. Click File, Reorganize Files.
    2. Click OK to acknowledge Data File Reorganization message.
    3. Click G/L Transactions.
    4. Click Reallocate Transaction data to new fiscal periods.
    5. Click Reorganize Icon.
    6. Click Yes to Confirm Reorganize to proceed.

    Run Trial Balance again for the month before the month that is out of balance.  **Note** the Closing Balances.  Run the Trial Balance for the month that was out of balance.  The Opening Balances should be the same as Closing Balances for the month before it. If they are run the Trial Balance for the current period and it should be in balance. If this does not fix the issue, this is an indication that the data is corrupted and needs to be repair, please contact Sage Customer Support for further options.

    When it is a previous fiscal period that was out, there are not too many options. You will need to talk to your Accountant to get an unbalanced journal entry created to fix the issue. Then log into Sage BusinessVision as the Unbalanced user and post the correcting journal entry in the month as per your accountant recommendation. Once this is complete run your Trial Balance and you should be balanced now.

    If you require assistant with these steps you can contact your Business Partner or Sage Customer Support.

    Please note that you must be on a Sage Business Care Plan with Support in order for us to provide assistant.

    Sage BusinessVision Resources

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