How to fix negative owner’s equity opening balance in QuickBooks?

Owner’s Equity Opening Balance

Have you recently been struggling to understand the reason behind the negative owner’s equity opening balance? Are you feeling that everything is a total mess as you tried to do everything possible but still not able to fix the negative balance issue in your QuickBooks software application? Well, your search for answers will end here as we are here to help.

In this article, we shall be discussing in detail the opening balance in QuickBooks and some simple steps to fix the issue of the negative opening balance. 

What is an opening balance in QuickBooks?

An opening balance in the QuickBooks software application is the sum total of money or capital that the subscribed users hold in their account in the course of preliminary arrangement or at the beginning of the Fiscal Year.

Causes of the negative opening balance in QuickBooks:

When the subscribed user makes an attempt to open the Begin Reconciliation window and then choose to reconcile an account, the opening balance is either negative or incorrect. This could be because of the following reasons:

• Zero balance or an inappropriate balance was recorded when the user was trying to set up the account.
• Until that time cleared and reconciled transactions were annulled, obliterated, or changed.
• The file was rehabilitated from some other version of QuickBooks.
• There could be a possibility of data impairment or corruption.

Important note: If you feel less confident about carrying out any of the steps as mentioned below, then we would recommend you to consult our QuickBooks tech support team for further assistance.

How to fix the issue of negative opening balance in the QuickBooks software application?

To correct the negative opening balance issue in the QuickBooks Desktop software application, you may need to refabricate the opening balance. For this, you need to follow the steps in the order as mentioned below:

If you are trying to reconcile the account for the first time, then you can refabricate the opening balance but this preference you won’t be able to find in the Begin Reconciliation window. Nevertheless, you can generate a journal entry then perform a small-reconciliation to rectify it.

1. You can generate a journal entry with the use of the accurate date and sum total you wish to see in the Begin Reconciliation window.
   • For this, you need to go to the Company main menu, and then click on the Make General Journal Entries.
   • Make the desired modification in the date to the accurate statement date of your beginning balance.
   • Look for the first line and there you need to choose the right account from the Account’s drop-down list.
   • Fill in the right opening balance in the Debit column.
   • Search for the second line, and then choose Opening Balance Equity.
   • Hit on the Save button.
2. You can even try your hand on the small-reconciliation to rectify the opening balance in the Begin Reconciliation window.

• Firstly, you need to go to the Banking main menu and click on the Reconcile option.
• Now, choose the right account from the Account’s drop-down list.
• Fill in the statement date and ending balance that similar to your Journal Entry.
• Now, click on the Continue button.
• Proceed to the Deposits and Other Credits section and there you need to choose the corresponding Journal Entry.

Note: The sum total as displayed for the Alteration should now be nil.

• In the end, just click on the Reconcile Now option.

To fix the issue of incorrect balance, you need to follow the given steps:

• In the first place, you need to rectify the modified, eliminated, or cleared transaction.
  • To find out these transactions, you need to run the given below reports:
    • Reconcile Discrepancy report
    • Audit Trail Report
    • Preceding Reconciliation report
  • To rectify the incongruity, you may need to again enter or make the desired changes in the transactions. For this, you can even perform the given below steps:
    • Undo a preceding reconciliation and redo the same
    • Pay no attention to the incongruity and let QuickBooks enter a counterbalancing amendments
    • Try to get contact your bank about a banking issue

Try to fix the anticipated data impairment or corruption

Sporadically, your data file may be impaired or corrupted. To resolve this issue, you can try these troubleshooting steps:

• Try to run the ‘Rebuild Data utility’ tool
• Make sure you run the verification data utility tool

Related News:

How to Track Owner’s Equity in QuickBooks 2017?

Steps to Set Up Beginning Balances in QuickBooks