Correcting problems with the System Balance report

 

The System Balance report is considered out of balance if the general ledger amount and the client ledger amount do not agree, for one or more control accounts.  The report will print "Out of balance" beside the out-of-balance account.  

 

Matters will be simplified if you have been printing the System Balance daily so that you know when the problem occurred.  For example, if the report balanced at day’s end yesterday but is out of balance today, you know the problem occurred today and you have only one day’s entries to review.

 

The steps below are guidelines only.  Don't enter correcting journal entries unless you understand how the entries will affect your system.

  1. If a hardware failure occurred follow the steps in Hardware failures.

  2. If one or more clients/matters are listed on your File Health report follow the steps in Correcting problems with the File Health report.

  3. Determine when the System Balance was last in balance, and then confine the rest of your investigation to entries since that time.

  4. Read Automatic Journal Entries to determine the type of entries that affect the account or accounts that are out of balance.  For example, if a trust bank is out of balance you will need to review trust checks, trust receipts and trust transfers to pay A/R.

  5. When you have determined the types of entries that affect the out-of-balance account, review all audits of that type that have been entered since the system was last in balance.  Look for the amount the account is out of balance by.  It is helpful to view the Detail Journal Listing for the accounts that are out of balance.  

  6. When you find an audit that you believe is related to the problem, determine if the audit updated the general ledger by viewing the Detail Journal Listing for the account that is out of balance.  Look for the audit number.

  7. Determine if the clients/matters were updated by checking the client details for the audit number.

  8. If the clients/matters were updated but the general ledger was not, manually record the journal entry in the general ledger referring to your audit and to the Automatic Journal Entries topics.

  9. If the general ledger was updated but the clients/matters were not, enter a journal entry to reverse the transaction out of the general ledger, and then re-enter the audit.