Balance Sheet

What this does

Reports → Balance Sheet is the shop's position at one moment: Assets (bank balances, undeposited funds, receivables, inventory, fixed assets net of depreciation), Liabilities (credit cards, payables, sales tax owed, loans), and Equity (what's left, including Retained Earnings from prior years and the current year's Net Income). Assets always equal liabilities plus equity; that isn't a check the report performs, it's what double-entry guarantees.

Before you start

reports.view. Reconcile the bank and card accounts through the date first; a balance sheet on unreconciled accounts is a guess.

Steps

Set As of (month end, quarter end, year end are the useful dates; the default is the end of the previous quarter) and Run Report. Each section lists its accounts with balances and a section total; Total Liabilities & Equity at the bottom equals Total Assets.

How it's built

Every balance-sheet account's posted balance through the as-of date. Retained Earnings and the current-year Net Income are computed from the revenue and expense accounts, so nothing has to be "closed" at year end; the report does the roll-forward itself.

Common problems

A bank account's balance is wrong. Compare it to the register and to the last reconciliation. Unposted deposits and inbox items in the queue aren't on the balance sheet yet.

Undeposited Funds has a balance. Payments recorded but not yet on a posted deposit slip. Normal for a few days; see Undeposited Funds.

Opening Balance Equity has a balance. Accounts were created with opening balances and nobody has reclassified the offset. Post a journal entry moving it to Retained Earnings or Owner's Equity once the opening balances are confirmed.

Accounts Receivable doesn't match the AR Aging total. Aging reads open invoices; the balance sheet reads posted entries. An invoice that didn't post, or a payment deleted without its reversal, is the difference. The nightly checks look for exactly this.