Out of Balance error when saving an Invoice

Legacy KB ID: 3960

Question

Why do I get an Out of Balance error when I try to save an invoice when there is no discrepancy?  It is a newly created file.

Answer

An out of balance error on an invoice can occur if there are problems with QuickBooks’ tax system.  The tax component may not be registering, or may be registering more than once, in the total of the invoice so the total is out of balance with the items and tax in the table.

Such an issue is more probable after an upgrade from a pre QBi version of QuickBooks (2007/08 and earlier), or when importing an IIF file created in a pre QBi version directly, or importing an IIF file created in a QBi version that did not address taxation problems related to the upgrade.    

Tax handling changes in QBi resulted in the Default Tax Agency having a critical function it did not have in pre QBi versions.  By default QBi sets the Default Tax Agency as Australian Taxation Office.  Pre QBi versions used this as well as Australian Tax Office.  Users were able to make any supplier a Tax Agent without any negative impact on QuickBooks functionality.

A pre QBi file that has a Tax Agency other than Australian Taxation Office, will have that supplier made a Tax Agent, in addition to Australian Taxation Office, on upgrade, or when an IIF file sourced from a pre-QBi version is imported.  More than one tax agency will result in, depending on configuration, either:

·         Paying tax more than once as tax is paid to each tax agency;

·         No tax paid at all if the other tax agent/s are assigned to Tax Items.

 

Solutions

Solution 1:

In the pre QBi version, set the Default Tax Agency to Australian Taxation Office.

You can view the Default Tax Agency in:  Edit > Preference > Tax > Company Preferences

Then upgrade the file to your QBi version again.

 

Solution 2:

In your QBi version of QuickBooks, check that the Tax Item is properly configured:

1.    Lists > Tax Items List > right-click GST (or other tax item);

2.    In the Tax Agency Box, select Australian Taxation Office;

3.    In the Tax Return Line, select Goods and Services Tax;

4.    (for free items and input taxed items, select the relevant option)

5.    Click OK.

This change will allow you to process the invoice.

You must reduce your Tax Agencies to just one for a permanent solution and to ensure all tax functions in QuickBooks operate and report properly. 

Click here for KB 329: Consolidating / merging multiple Tax Agencies - Australian Taxation Office, Australian Tax Office, ATO etc in QuickBooks;
for directions. 

 

 

How did we do?

Other charge item percentage calculation is wrong if the invoice is inclusive of GST.

Strange characters appear next to the total amount on invoices, eg, a 'J' instead of a '$'

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