The Statement of Financial Position (Balance Sheet) does not balance. How do I determine what is causing the imbalance?
We recommend using the following instructions to identify the issue causing the imbalance.
Note: Ensure you have Created Entries
The message 'Out of Balance - consisting of current year profit/loss not allocated to members' will display all Profit and Loss accounts that have not been allocated by The Create Entries Process.
If this has not been completed, you will need to do so in order to balance your financials.
i.e. If you are generating a Balance Sheet as at 30/06/2022 you need to Create Entries to this date.
You can create entries by navigating to Compliance > Period Compliance.
If the imbalance still remains, proceed to the instructions below.
To begin, generate a Statement of Financial Position that is unrounded and with comparatives on. This is done to determine the amount of the imbalance and in what financial year this imbalance occurred:
- If “Statement of Financial Position Does Not Balance” is 0 or (0), the report is rounded and the out-of-balance amount is less than 50 cents. To see the out-of-balance amount, change the badge settings, click save, and then generate the report again with this setting selected.
- If an imbalance occurs in a prior financial year, the fund will need to be reconciled with the prior year's audited financial statements.
In this case, please submit a support call outlining what year the imbalance is occurring. Attach the relevant financial year's audited statements and we will review and ensure the fund is reconciled.
Now that the Statement of Financial Position has been generated, note if any clearing accounts contain a balance (these will display at the bottom of the report). Any amounts remaining in clearing accounts will need to be allocated to the correct accounts. Refer to Transaction Matching for instructions.
After this is complete, reverse and recreate entries, see: The Create Entries Process. Any transactions potentially input after the last create entries date would not be accounted for in profit/loss calculations. reversing and recreating entries ensures this is not the issue.
- If the imbalance has not been resolved, proceed to review the following possible solutions:
If “Statement of Financial Position Does Not Balance” is the same value as “profit/loss not allocated to members” try to create entries with the member allocation worksheet enabled.
In this case, if you encounter issues allocating the profit/loss, this indicates that there is an issue with member transactions, start dates, or fund details dates. Review the following solutions to determine the issue:
Simple Fund 360 will allocate Profit/Loss to the member accounts from the Member Start Date.
If a transaction is entered before any of the members' Start Date, the program will not allocate the profit or loss amount associated with this transaction to the members.
To fix this issue, correct the Start Date.
|From the Main Toolbar, go to Member.
|Select Member list.
- From the Member List screen, edit the member account.
- Correct the member start date in the Start Date field and select save.
- You will need to reverse and re-create entries for Simple Fund 360 to account for any transactions prior to the original start date entered. See The Create Entries Process for more.
Simple Fund 360 will allocate Profit/Loss to the member accounts starting from the System Start Date.
If the date entered is after the date of a member income or expense transaction (contributions, pension payments) the program will not allocate the profit/loss from this transaction to the members.
To resolve this issue, ensure the System Start Date is entered correctly. Refer to the System Start Date for more information.
Note: Any member transactions recorded prior to the original System Start Date input will need to be re-saved. From the Transaction List, apply the date filter to display the date range prior to the original System Start Date.
Locate the member transactions. Click on each transaction and when in the edit screen, select Save. Re-editing the transactions will produce the Simple Fund 360 member allocation journals that did not originally calculate.
This indicates that member accounts have been created in the opening balances period prior to entering the System Start Date. In this case, the transactions will need to be manually adjusted by our Support Team.
Please submit a support call with information about which transactions are posted to the above accounts so that we can adjust the transactions accordingly.
If there doesn't appear to be an issue with Step 1, or if “Statement of Financial Position Does Not Balance” is a different value compared to “profit/loss not allocated to members”, review the following:
If the Transaction List is out of balance, this indicates that there is a transaction where the Debits and Credits do not match.
|From the Main Toolbar, go to Accounting.
|Select Transaction list
Scroll down to the bottom of the page to display the Total figures
The first Total amount represents the amount of units recorded from the transactions appearing in this page. The second amount displays the Debits and the third amount displays the Credits.
In this Example, the Debits is $1 more than the Credits amount causing an imbalance.
If the Debit and Credit amounts do not match then there is a transaction that needs to be corrected.
Search the transaction list for the transaction causing the imbalance.
In this Example, there are 2 lines for Bank charges causing the imbalance
Once found, correct the transaction(s) to resolve the issue.
NoteThe Transaction List will display up to 50 transactions per page. The Total column will only represent the transactions appearing in the screen at that time. Ensure to view all pages of the transaction list to ensure all the transactions balance.
- The amounts posted to income/expense accounts related to members should match the relevant system account in the 50000-59999 range.
- For more information about these system accounts, see System Accounts related to Members.
The transactions should display the same amount. If not then either the income/expense transaction(s) information in the more details panel has not been entered correctly (does not match the total amount of the transaction) or the member allocation journal was not created.
Locate the member transactions. Edit and ensure the details are correct. When in the edit screen, select Save. Re-saving the transactions will also produce the member allocation journals that did not originally calculate.
The issue could be determined if the Trial Balance does not balance. In this instance, compare the trial balance with the General Ledger to determine the difference. If Accounts are missing, add them back.
A potential cause was the write back for deferred tax being processed incorrectly. For guidance on how to ensure that you have processed the write back for deferred tax correctly, please see the following article.
If any of the options did not provide a solution to the imbalance, check to see if any of the unique solutions below may apply:
Migration System Journals are automatic journals that occur during the Migration process and should not be edited.
If a user has either edited or re-saved an existing migration journal Simple Fund 360 will treat the transaction as a current year transaction causing the imbalance to occur. BGL Support will be able to revert the journal to it's original status. Please Log a Support Call for assistance.
This imbalance occurs when a user has created entries part way through the year with Tax Effect Accounting turned on. Then prior to the final create entries, Tax Effect Accounting is turned off.
To fix this, navigate to Fund > Fund Details and toggle the Tax Effect Accounting option on. Then navigate to Compliance > Period Compliance, reverse the last created entries, then create entries to 30 June.
If Tax Effect Accounting is not to be used in the current financial year, reverse entries and then writeback the deferred tax (however we recommend writing back deferred tax at the beginning of the financial year on 01/07/XXXX). Finally, create entries to 30 June and check the Balance Sheet.
If a figure should be feeding through to the Statement of Financial Position, however when the report is prepared, the figure does not appear, this could be due to the relevant account within the Chart of Accounts not being linked to the entity.
To check if this is the issue, access the Chart of Accounts and have Entity View toggled (top right hand corner of Chart of Accounts screen). Within this screen, attempt to locate the account that the balance of should be feeding through to the Statement of Financial position. If you are able to locate the account then this is not the issue. If you were unable to locate the account then read on.
From within the Chart of Accounts screen, change the toggle from Entity View to Global View. If you are able to locate the relevant account, then proceed to click on it, which will expand the Edit Other Account menu. Click the Select entities drop-down menu and proceed to add the relevant Entity.
Select save once the Entity has been added. Proceed to Reverse and Recreate entries. Re-prepare the Statement of Financial Position and check if the balance now appears.