Statements must be in balance in order to generate reports (excluding the Input Form, Comments – All, and Comments - External reports), prepare projections, and use various other program functions. Red numbers indicate an imbalance and the amount of the imbalance. The balancing feature helps you balance your statement and alerts you to imbalances, and you can also use a plug feature for irreconcilable imbalances.

Note: The one report that you can run on an out-of-balance statement is the Input Form report, which can be helpful to you in reconciling the statement.

About the Balancing Feature

In calculating whether the statement is in balance, the application considers the four parts of the statement separately, in the following order. (If one of these parts is absent from the statement due to the selected industry, the application ignores that part and considers only the existing parts.)

1. Balance Sheet Reconciliation

   An imbalance in Assets (Liabilities + Net Worth) may be the result of rounding errors that occurred when converting actual dollars to another dollar unit. Also, compare the subtotals from the actual financial statements with the entries in the spreadsheet.

2. Income Statement Reconciliation

   A common cause of an income statement imbalance is forgetting to enter the Net Income account, which is unlike other totals in the spreadsheet because the application does not calculate it. The application balances the income statement against your entry in the Net Income account.

3. Net Worth Reconciliation

   Note: Even though the application considers net worth before retained earnings, you should reconcile retained earnings before you reconcile net worth.

   The equity lines in the balance sheet section are duplicated in the reconciliation section; your first check when reconciling net worth might be to make sure that changes to these items in the liability section have been recorded in the reconciliation section.

   The net worth calculation is as follows:

   Prior Year Beginning Net Worth + Prior Year Total Change in Retained Earnings + Prior Year Net Worth Reconciliation Accounts = Current Year Net Worth.

   Note: This is also the same as Prior Year Ending Net Worth.

   The application reconciles net worth against the accounts (line numbers in parentheses indicate the account for a negative number) shown in this table.

   Industry	Beginning Net Worth Line Number	Total Change in Retained Earnings Line Number	"Other" Net Worth Balance Sheet Line Numbers	"Other" Net Worth Reconciliation Line Numbers
   Agricultural (AGR)	208	218	128 to 134. 136	221 to 228
   Contractors (CON)	220	230	136 to 144, 146	233 to 242
   General & Middle Market (GEN)	220	230	136 to 144, 146	233 to 242
   Partnerships (PAR)	220	230	136 to 144, 146	233 to 242
   Small Business (SMB)	148	158	81 to 88, 90	161 to 169
   Sole Proprietor (SOL)	220	230	136 to 144, 146	233 to 242
   Tax Returns + Owner Data (TAX)	145	156	66, 67, 71, 72	159 to 164

    

4. Retained Earnings Reconciliation

   A common cause of retained earnings imbalances has to do with dividends. The calculation for retained earnings is as follows:

   Prior Year Retained Earnings + Current Year Net Income - Current Year Dividends Reconciliation Accounts + Current Year Other Retained Earnings Reconciliation Accounts = Current Year Retained Earnings

   The application reconciles retained earnings against the accounts (line numbers in parentheses indicate the account for a negative number) shown in this table.

   Industry	Retained Earnings Line Number	Net Income Line Number	Dividends Reconciliation Accounts Line Number	Other Retained Earnings Reconciliation Accounts Line Numbers
   Agricultural (AGR)	135	206 (210)	211 and 212	213 to 216
   Contractors (CON)	145	218 (222)	223 and 224	225 to 228
   General & Middle Market (GEN)	145	218 (222)	223 and 224	225 to 228
   Partnerships (PAR)	145	218 (222)	223 and 224	225 to 228
   Small Business (SMB)	89	146 (150)	151 and 152	153 to 156
   Sole Proprietor (SOL)	145	218 (222)	223 and 224	225 to 228
   Tax Returns + Owner Data (TAX)	69	143 (147)	148 and 149	151 to 154

Steps: Balance Statement

To check whether a statement is in balance and, if it's not, to see period by period where it is in imbalance, go to the Balance Info dialog box.

1. From the historical statement page, use one of these two methods:

   • Click the Balance link that appears at the top of the spreadsheet.

   • Click (the action menu button) in the upper-right corner of the spreadsheet and choose Statement > Balance Statement from the action menu.

   • If the statement is in balance, the header cell for each period indicates Balanced. If the statement is not in balance, the Balance Info dialog box appears. When you close the Balance Info dialog box, the header cell for each period indicates the amount of the imbalance for that period.

2. Review the spreadsheet numbers to correct the imbalances for the balance sheet, the income statement, net worth, and retained earnings.

   Note: Please note the following:

   • The application will not automatically update the balance information as you modify the data in the statement. You'll need to repeat Step 1 to check whether your updates have balanced the statement.

   • As you modify data in the statement, the application adds an asterisk (*) to the balance information in the header cells to indicate that the data has changed since you last checked whether the statement is in balance, potentially rendering the balance information inaccurate.

   • If necessary, you may want to use the application's Plug feature, which plugs in reconciliation figures to force the statement into balance. Before you can use this feature, the balance sheet and the income statement must already be in balance.

   • The imbalance may be due to data entry error or some other mistake and bear further investigation and a complete review of the statement.

Steps: Plug

If the balance sheet and the income statement are in balance and either retained earnings or net worth will not (for some valid reason) reconcile, you may want to use the Plug feature.

To use the Plug feature, follow these steps from the historical statement page:

1. Click (the action menu button) in the upper-right corner of the spreadsheet and choose Statement > Plug Statement from the action menu.

2. If the balance sheet or the income statement is not in balance, or if the whole statement is already in balance, you receive a message telling you that you cannot use the plug.

   Otherwise, the application calculates the net changes for the net worth and/or retained earnings section and enters the value(s) in the reconciliation section of the spreadsheet. This table shows the specific line numbers.

   Industry	Retained Earnings Line Number	Net Income Line Number
   Agricultural (AGR)	216	226
   Contractors (CON)	228	240
   General & Middle Market (GEN)	228	240
   Partnerships (PAR)	228	240
   Small Business (SMB)	156	167
   Sole Proprietor (SOL)	228	240
   Tax Returns + Owner Data (TAX)	154	164

    

   Note: When the application plugs a value in a reconciliation line, the account title changes to Unreconciled Differences.

   Also, note that these reconciliation lines must have a zero balance in all periods of the currently active view, even when the line was used as a plug in a previous reconciliation.