Why Your Balance Sheet Doesn’t Balance (And What You Probably Missed)
“Hey Dr. Raya, my balance sheet is off by like… $7,000. What does that mean?”
First, take a deep breath.
Second, you’re not alone.
As a QuickBooks ProAdvisor, I’ve helped dozens of entrepreneurs fix messy balance sheets—and the truth is, it’s usually a few small but common mistakes that throw everything off.
So, let’s talk about what causes a balance sheet to go sideways—and what you may have missed.
But First… What’s a Balance Sheet?
A balance sheet is a snapshot of your business’s financial position on a specific date (often December 31 for tax season). It shows:
What you own (Assets)
What you owe (Liabilities)
What’s left over (Equity)
It should balance like this:
Assets = Liabilities + Equity
When it doesn’t, QuickBooks doesn’t cry—but your CPA might.
Most Common Balance Sheet Issues I See
Unreconciled Bank Accounts
If your checking or credit card accounts haven’t been reconciled, your balance sheet will be off. It’s like trying to bake a cake without measuring anything.Unapplied Payments or Open Invoices
You recorded income, but the invoice or payment wasn’t closed properly. It’s income limbo—and it causes major confusion on reports.Old Loans with No Payments
You listed a loan as income (ouch) or forgot to record regular payments to reduce the liability.Owner Draws Not Tracked Correctly
Pulling money out of the business? That’s not an expense—it affects Equity, and it needs to be tracked accordingly.Missing Assets
Bought a laptop? Equipment? Vehicle? If it’s not listed in your Assets, your balance sheet isn’t telling the whole story.Undeposited Funds Pile-Up
This sneaky QBO feature often goes ignored. If you take payments but don’t match them correctly to deposits—boom, balance sheet chaos.
Dr. Raya’s Balance Sheet Pro Tips
Reconcile your accounts every month—don’t wait until tax season.
Run your balance sheet as of Dec 31 (or month-end) to get a true snapshot.
Categorize loan payments correctly: principal reduces the liability; interest is an expense.
Track any owner contributions or draws under equity—not expenses.
Use QBO's "Undeposited Funds" report to catch duplicate or missing income.
FAQ I Hear Every Month
Q: My balance sheet shows I have $10,000, but my bank only has $200. What’s wrong?
A: Likely miscategorized income, open invoices, or an undeposited funds issue.
Q: I don’t have employees, but Payroll Liabilities are on my balance sheet?
A: QuickBooks sometimes adds this by default. If you’ve never processed payroll, it may be safe to clean up (with care).
Q: My loans don’t show anything, even though I make monthly payments.
A: You may have categorized the full payment as an expense instead of splitting principal and interest.
Don’t Let Your Balance Sheet Be a Mystery
Your balance sheet should help you make decisions—not make you question your business (or your sanity).
If yours isn’t balancing, looking odd, or you’re unsure what belongs where—I can help.
✅ Book a free 30-minute call with me, Dr. Bryan Raya.
I’ve saved my clients over $200,000 in taxes in 2025 alone—just by cleaning up books and making balance sheets make sense.
Let’s start Doing Business Right.
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