When you’re using QuickBooks Online for accounting, one common issue you may encounter is the dreaded “Debits and Credits Don’t Match” error while entering journal entries. This error can leave you puzzled, especially when you’re sure your numbers should balance. But don’t worry—this error is a relatively simple issue to resolve if you know where to look.
In this blog, we will walk you through the possible causes of the “Debits and Credits Don’t Match” error in QuickBooks Online, and provide solutions to fix it.
Why Does “Debits and Credits Don’t Match” Error Occur in QuickBooks Online?
QuickBooks Online is built on the principle of double-entry accounting, which means that for every transaction, there must be at least one debit and one credit, and the totals must balance. If the total debits do not equal the total credits, QuickBooks will alert you with the “Debits and Credits Don’t Match” error.
Here are the primary causes of this issue:
- Unequal Debit and Credit Amounts: The most common reason for this error is that the debit and credit amounts don’t match.
- Incorrect Journal Entry: If you mistakenly enter an incorrect journal entry (like an additional or missing debit or credit), it will throw off the balance.
- Wrong Accounts: Using the wrong accounts (e.g., choosing an asset account instead of an expense account) can lead to accounting imbalances.
- Multiple Line Entries: Sometimes, multiple line entries can make it hard to spot the imbalance between debits and credits.
- Currency or Exchange Rate Errors: If you’re using different currencies, fluctuations in exchange rates might affect how your debits and credits balance.
Solutions to Fix the “Debits and Credits Don’t Match” Error
If you’re encountering the ‘Debits and Credits Don’t Match’ error in QuickBooks Online, don’t worry—it’s a common issue that can be easily fixed. Below are some effective solutions to help you resolve the error and ensure your journal entries balance correctly.
Solution 1: Double-Check the Debit and Credit Amounts
The first thing you should do is verify that the total debits and credits are equal. In QuickBooks, this is easy to check by reviewing the Journal Entry screen. The total debits must always equal the total credits.
- Go to the Gear icon in QuickBooks Online.
- Select Chart of Accounts.
- Click on Journal Entries under the Transactions section.
- Review the debits and credits in the journal entry to ensure they balance.
Solution 2: Review Each Line Item in the Journal Entry
Sometimes, an entry might look balanced at first glance but contain a mistake in one of the line items. QuickBooks might allow you to enter multiple debits or credits in a single journal entry. However, a single incorrect amount on any line can throw off the entire entry.
- Open the journal entry and check each line to ensure the debits and credits are accurate.
- Make sure each account is being debited or credited correctly (for example, an expense should be debited, and a liability should be credited).
- Ensure the amounts match what you intend to post.
Solution 3: Verify Your Account Types
Another common mistake when entering journal entries is selecting the wrong accounts. This could result in an imbalance between debits and credits.
- Check that the accounts you’re using in your journal entry are correct. For example, if you’re recording an expense, ensure the expense account is listed as the debit and the corresponding bank or liability account as the credit.
Solution 4: Use the “Check” Function in QuickBooks Online
QuickBooks offers a simple way to see if your debits and credits balance. The “Check” function in QuickBooks Online can automatically flag any discrepancies for you.
- After entering the journal entry, click Save and Close.
- QuickBooks will display a message if the debits and credits don’t balance.
- If the system detects an issue, it will prompt you to correct the error before saving.
Solution 5: Review for Currency or Exchange Rate Issues
If your journal entry involves multiple currencies, make sure the exchange rates are accurate. A mismatch in the exchange rate can cause the totals to appear unbalanced.
- Make sure that the exchange rate for each currency transaction is correct.
- Double-check that the amounts entered for each currency are accurate.
Solution 6: Re-enter the Journal Entry
If you’ve checked everything and still can’t find the issue, sometimes the simplest solution is to delete and re-enter the journal entry from scratch.
- Go to the Journal Entry screen.
- Select the erroneous entry and click Delete.
- Create a new journal entry, making sure to double-check each field before saving.
Tips for Preventing “Debits and Credits Don’t Match” Errors in the Future
- Use Bank Feeds: Connecting your bank account to QuickBooks can help reduce human error when entering transactions.
- Reconcile Regularly: Regular reconciliation of your bank accounts and credit cards helps catch errors before they become big issues.
- Double-Check Before Posting: Always review your journal entries before posting them to ensure accuracy.
- Consult an Accountant: If you’re unsure about accounting principles or journal entries, consider working with a professional accountant.
Conclusion
The “Debits and Credits Don’t Match” error in QuickBooks Online can be frustrating, but it’s usually fixable with a few simple checks. By verifying the amounts, reviewing each line item, ensuring your accounts are correct, and using the tools QuickBooks provides, you can resolve this error quickly.
If the error persists, don’t hesitate to reach out to QuickBooks support at 1-888-820-7278 for additional help. With the right steps, your journal entries will balance out, and your QuickBooks Online account will be in tip-top shape!
Frequently Asked Questions
If you leave the error unresolved, it can cause issues with your financial reports, tax filings, and overall accuracy in your accounting records. It’s essential to fix it to ensure your financial statements are correct.
Yes, QuickBooks allows you to delete or void journal entries if you made a mistake. You can do this by going to the Journal Entry screen, finding the erroneous entry, and selecting Delete or Void.
After entering a journal entry, always double-check that the debits equal credits and that the correct accounts are used. You can also run a trial balance report to confirm everything is accurate.
In QuickBooks Online, if transactions aren’t automatically matching with your bank feed, you can manually match them. To do this:
1. Go to the Banking or Transactions tab.
2. Select the bank account you’re working with.
3. Find the transaction and click on it.
4. Select Match to find an existing transaction in QuickBooks or Add if the transaction is new.
5. If there’s no match, you can manually create one by selecting Create and entering the details.
Matching journal entries in QuickBooks Online is essential for reconciling accounts accurately. To match journal entries:
1. Open QuickBooks Online and go to the Accounting tab.
2. Click on Chart of Accounts and then select the relevant account.
3. Look for the journal entry and click View to check the details.
4. Compare the journal entries for the correct debits and credits.
5. If needed, adjust the amounts or accounts, ensuring that total debits equal total credits.
If your numbers don’t match during reconciliation in QuickBooks:
1. Check all entries for accuracy, including the opening balance, transaction dates, and amounts.
2. Compare the bank statement with the transactions entered in QuickBooks.
3. Look for any missing or duplicate entries and correct them.
4. If discrepancies persist, you may need to use the Reconciliation Discrepancy Report to identify the error.
Transactions may not match in QuickBooks Online due to:
1. Incorrect date ranges or amount mismatches.
2. Missing transactions in either your bank feed or QuickBooks.
3. Bank account discrepancies: Ensure you’re matching the correct bank account in QuickBooks.
4. If you’re working with multiple currencies, make sure the exchange rates are accurate.
To resolve this, check the transaction details, make adjustments, and try matching again.
To balance debits and credits in a QuickBooks journal entry:
1. Always ensure that the total debits equal the total credits.
2. Double-check that you’re using the correct accounts (e.g., debiting an expense and crediting a bank or liability account).
3. QuickBooks will alert you if the debits and credits don’t match, so check the individual line items for discrepancies.
To access the Reconciliation Discrepancy Report in QuickBooks Online:
1. Go to the Gear icon and click on Reports.
2. In the search bar, type Reconciliation Discrepancy.
3. Select the report from the list to view any discrepancies between your QuickBooks balances and your bank statement.
4. The report will show the differences and help you identify which transactions need adjustments.
When entering debits and credits in QuickBooks:
1. Navigate to the + New button and select Journal Entry.
2. Choose the account to debit and the amount to debit.
3. For the credit, select the corresponding account (e.g., revenue, liability) and enter the credit amount.
4. Ensure that total debits equal total credits before saving the journal entry.
To access journal entries in QuickBooks Online:
1. Click on the Gear icon in the top-right corner.
2. Under the Tools section, select Chart of Accounts.
3. Find the account you want to view journal entries for.
4. Click on the View Register link for that account.
5. You can also run the Journal Report from the Reports tab to see all journal entries.
If you encounter issues at the end of reconciliation in QuickBooks Online:
1. Double-check all transactions for accuracy and ensure all entries have been accounted for.
2. Review the Reconciliation Discrepancy Report for any mismatched entries.
3. If necessary, make corrections or adjustments to previously reconciled entries.
4. Reconcile one transaction at a time to avoid overlooking discrepancies.
