Trial Balance reports come in a variety of formats or flavors. For instance, a post-closing Trial Balance represents the beginning account balances for the next year or what accountants commonly refer to as “Opening Entries”. The account balances in an unadjusted Trial Balance include beginning balances plus the activity for the current fiscal or calendar year.
An engagement using BalanceWare software starts with either the Opening Entries or the Unadjusted Trial Balance, which is determined by your client. Use BalanceWare’s Writeup tab to add a client’s current year activity to Opening Entries. Use the Accounting tab when starting a client engagement with an Unadjusted Trial Balance and after Writeup tasks are complete.
Accounts on the adjusted Trial Balance are final balances. BalanceWare displays and prints a working Trial Balance, as shown above. The working Trial Balance includes columns for the:
The BalanceWare Accounting and Income Tax dashboards are displayed as Trial Balances, showing the Unadjusted Balances, the Adjustments, and the Adjusted Trial Balance. Drilldown features in the BalanceWare dashboards provide the ability to view the detail behind the Trial Balance totals, with just a few keystrokes.
BalanceWare software includes several tools to import a client’s Trial Balance. If the client uses QuickBooks, BalanceWare can import a QuickBooks Trial Balance Report which has been exported to an Excel workbook or a Comma Separated Values (CSV) file.
Excel templates are included with BalanceWare for importing a Trial Balance from any accounting system, assuming the accounting software can export to a CSV file or to Excel. During the Trial Balance import, BalanceWare will add accounts to the Chart of Accounts as needed. This is a great way to start a new engagement from scratch, as the Chart of Accounts is automatically generated during the Trial Balance import process.
There are ample tools in BalanceWare to complete the process of creating an Adjusted Trial Balance. If the Beginning Balances in the Trial Balance are Opening Entries, BalanceWare offers Cash Disbursements entry as well as a Bank Reconciliation Dashboard. BalanceWare’s importing and exporting features on the Writeup tab make these processes quick and easy. All import processes in BalanceWare include an optional template which can be used to help ensure that the import data structure will be accepted by the BalanceWare software. The templates are recommended initially to become familiar with the process.
Most clients have access to on-line banking and when used with BalanceWare, Writeup services can become highly profitable, as BalanceWare eliminates most of the labor. The most efficient scenario includes an import of Cash Disbursements and an import of an on-line banking feed of cleared charges. The BalanceWare Bank Reconciliation will record and analyze the imports and provide a list of:
From the Bank Reconciliation Dashboard, charges can be cleared, uncleared, issued and modified, with Bank Reconciliation totals updated as changes are made. Outstanding checks are carried to the next year by BalanceWare during the year-end closing procedure. It does not get any easier than BalanceWare’s Bank Reconciliation dashboard!
If the client has provided an Unadjusted Trial Balance and/or Writeup is complete it is time to move on to the Accounting tab and the Accounting Dashboard which, in conjunction with Journal Entries, provides the primary tool for completing the Adjusted Trial Balance.
The Accounting dashboard displays the Unadjusted Trial Balance, Adjustments, and the Adjusted Trial Balance along with totals for Assets, Liabilities, Equity and Net Income (see image above). The Tag feature in BalanceWare can be used to total a subset of accounts or to mark an account reconciled. If the balance changes after tagging an account, the shape of the Tag will change from a checkmark to a black square. This feature is designed to bring a discrepancy to your attention before starting income tax work. It is a best practice to create an Adjusted Trial Balance that is income tax-ready because once you start a tax return, any changes must be recorded in the return and in BalanceWare. It is efficient to start the process in tax preparation with an accurate Adjusted Trail Balance.
The Accounting dashboard includes a targeted adjustment tool. Enter the desired balance for an account and BalanceWare will create a Journal Entry with the appropriate adjustment. Selecting the auto-reverse button on the Journal Entry form will, you guessed it, reverse the Journal Entry in the subsequent year. This task is accomplished during the closing process.
Tax Journal Entries are created on the Journal Entry form. These entries will be displayed on the Tax and Tax Prep dashboards only. These adjustments are used to reconcile the tax return to the Adjusted Trial Balance and are used for non-deductible expenses such as meals and tips, entertainment and other non-deductible costs expensed on the client’s Adjusted Trial Balance. Tax adjustments can be used for a variety of other purposes, depending on a client’s requirements. Importantly, tax adjustments will not modify the client’s Adjusted Trial Balance.
In some situations, it may be necessary to create an account just for a tax adjustment. For instance, if Meals and Tips are partially deductible, create an account for the non-deductible Meals and Tips. Map this new account to a schedule M-1 line and map the original account to the Meals and Tips Deduction (100%) line. Make a tax journal entry crediting the original Meals and Tips account for the non-deductible costs and debit the newly created account, mapped to the M-1 line. In your Adjusted Trial Balance, you will see a zero balance in the newly created M-1 account, and the proper full cost in the Meals and Tips expense line. Opening either the Tax dashboard or the Tax Prep dashboard will reveal the adjustments.
The Tax dashboard is like the Accounting Dashboard. Instead of Starting with the Unadjusted Trial Balance, the left column of the Tax dashboard contains the Adjusted Trial Balance. The second and third columns contain the Tax Adjustments and Adjusted Income Tax Trial Balance. Drill-down is standard on all BalanceWare dashboards.
The Tax Prep dashboard is presented in tax-line format. Since the Tax Prep dashboard has drill-down, any type of adjustment can be accomplished from the dashboard. The Tax Prep dashboard is equally adept when used as a tax preparation tool. Tags are available and most used to indicate that the line has been entered into the tax software. Both Tax Prep Summary and Tax Prep Detail reports are available as well. Tax lines can be exported to any income tax software platform that accepts a QuickBooks Tax Summary Report print file. This method is highly recommended and performs a tax software/BalanceWare handshake with a remarkably high accuracy rate.
Not all tax software packages import a QuickBooks Tax Summary. In this regard, I would be most appreciative of any insights on additional interface specifications for various tax products.
The Trial Balance plays an important role in the BalanceWare user interface. The Accounting and Tax dashboards use the familiar look of a classicTrial Balance. All common tasks can be launched from the dashboards, such as chart changes, adjustments, generating reports, etc. And in true BalanceWare style, all open windows are dynamically updated.
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