About the Trial Balance report
The Trial Balance report shows a snapshot of the balances of each nominal ledger account at a point of time. The report includes cumulative totals of the debits and credits posted to each account.
Why is it important?
The Trial Balance report is important because it gives you a view of all ledger accounts. This includes all Balance Sheet and Profit and Loss accounts together in one report. In review, you can easily spot account balances that look wrong, where the balance may be too high or too low. This helps you to find problems and fix them before running other financial reports such as the Profit and Loss or Balance Sheet.
The Trial Balance report is also important for forecasting and analysis. For example, you may run a report of this year’s balances and one of last year’s balances to compare costs, expenses, and income. This data is critical for budgeting and to help you make important financial decisions about your business.
After running the Trial Balance report, you can export it in PDF or CSV format for further analysis. The CSV format allows you to import the data to another program such as Microsoft Excel for further analysis.
Running the report
You can run the Trial Balance report any time you want to see all your ledger account balances or to perform an analysis. You can change the format of the report by selecting a different reporting period and other criteria.
Go to Reports, Trial Balance to open the report page and then set the report criteria. The options in the Period field are to see balances “as of” a specific date or to see movements in and out of the accounts for analysis.
As of a date
Select As of in the Period field and then enter a date in the field next to it to see the ledger account balances up to the selected date. Instead of showing activity in a period, the report will show account balances from the start of the accounts through the selected date.
For example, you started using Sage Accounting Start on 15 January 2018. Today is 29 June 2020 and you want to see your ledger account balances. There is no specific period; you simply want to see where you stand as of today. To do this, you select As of in the Period field and then enter 29/06/2020 in the Date field, the balances on the report will be from 15 January 2018 through 29 June 2020.
With the As of option, the report data is displayed in a standard, four column format.
Analysis options, focused on in/out movements
To run an analysis report, select one of these options in the Period field:
- This year, Last year, This financial year, or Last financial year. Select This year or Last year to see balances from 1 January - 31 December for the current or the last calendar year. Select This financial year or Last financial year to see balances for the current or last financial year. Financial year periods are only applicable if you've entered a financial year end in Financial settings.
- This month, Last month, This quarter, or Last quarter. Select This month or Last month to see balances for the current or the last month. Select This quarter or Last quarter to see balances for the current quarter (three months) or last quarter.
- Custom. Select this option if you want to enter your own date range in the From and To fields.
Opening and closing balances
You may also want to add these adjustment options to the criteria:
- This period only or Show opening & closing balances. Select This period only to see only movement in the selected period without the opening and closing balances. To include them, select Show opening & closing balances.
- When you select Show opening & closing balances, the report includes all entries made before the selected period, including entries from the previous financial year. By default, these show in the balances for the ledger accounts where the entries were posted in the Opening Balance column.
- When Show opening & closing balances is selected, you can also tick the Summarise profit and loss values option. If you tick this option, a summarised Profit and Loss line is added to the Trial Balance report. This option summarises Profit and Loss balances for all previous years on one line with the current year’s Profit and Loss activity listed below by each account.
The Summarise profit and loss values option is also available if you select As of in the Period field.
About summarised profit and loss values
If you tick the Summarise profit and loss values box, the summarised balance includes all the previous year’s transactions posted to Profit and Loss ledger accounts plus any journal entries posted directly to the Profit and Loss account.
If you run the report specifically for a previous year, the Profit and Loss accounts are reported in detail for each ledger account. They are not summarised on the Profit and Loss line for the reporting period (shown in the middle column).
For example, your financial year ends on 31 December. You entered three sales invoices during the year: one in the current month for £500, one in the previous month for £200, and one in the previous financial year for £100. All the sales invoices were posted to the Sales Income ledger account. You select This Month (in the Period field) and select Show opening & closing balances before running the Trial Balance report. If you:
- Leave Summarise profit and loss values unticked, the report shows the Sales Income ledger account balance of £500 for the current month and £300 in the Opening Balance column. The Closing Balance column shows £800.
- Tick Summarise profit and loss values, the report shows the Sales Income ledger account balance of £500 for the current month, £200 in the Opening Balance column, and £700 in the Closing Balance column. A total of £100 shows on the Profit and Loss line. If you expand the line, you can see that the transaction lines show zero balances in the month column and £100 shows in the Opening Balance and Closing Balance columns.
If you posted a journal entry directly to Profit and Loss, you can split it out from the summarised (system calculated) totals. Drilling down on the manual entry will open the Nominal Activity report and drilling down from the summarised totals will open the Profit and Loss report. Where you have collapsed them into one amount, the drill down ability is disabled.
Hide zero balance accounts. By default, this box is ticked, which excludes ledger accounts with a zero balance on the report. If you untick this box, ledger accounts with activity in the period, where the net balance is zero, are included on the report. Ledger accounts that have no posting activity are excluded.
Ledger accounts that have never been posted to are always hidden on the Trial Balance report.
Drilling down the report data
Click any balance in the Debit or Credit column to see the transactions that make up that balance. If you drill down on:
- A Balance Sheet ledger account (except for Profit and Loss), the Nominal Activity report opens for you to review the transactions posted to the account. Click an amount to drill down further as needed.
- The Profit and Loss line, the Profit and Loss report opens, detailing the account balances that have been summarised into Profit and Loss.
To return to the Trial Balance report, click Back in your browser.
Finding and fixing errors
If your ledger account balances are higher or lower than expected, this could indicate missing, double-booked, or incorrect postings. Drilling down is the best way to investigate any balance that appears incorrect on the Trial Balance report. No matter which balance you click, you can always drill down all the way to individual transactions.
To fix a posting error, you will need to either amend the incorrect transaction or create a journal entry. Whenever possible, it is best to amend an incorrect transaction. However, if the transaction is settled and you need to fix it with a journal entry, keep in mind that:
- You must select the effected ledger account on the adjustment side of the journal entry.
- It must be the opposite type of entry as the erroneous entry.
- If multiple lines, they must equal the amount of the erroneous entry.