QuickBooks balance sheet explained: run a balance sheet from QuickBooks Online or Desktop, read each section, pick cash or accrual, and fix one that is wrong.
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Last updated August 2026.
To run a QuickBooks balance sheet in QuickBooks Online, select Reports in the left navigation, open the Standard tab and choose Balance Sheet under Business overview. Set the as of date, pick Cash or Accrual under the accounting method, and select Run report. In QuickBooks Desktop the same report is at Reports > Company & Financial > Balance Sheet Standard.
A balance sheet is a snapshot of one single day. The profit and loss covers a stretch of time and tells you whether you made money; the balance sheet stops the clock on a date and tells you what you own, what you owe, and what is left over. Assets on one side, liabilities and equity on the other, and the two sides have to come out equal. That is the whole idea, and it is why the report is called a balance sheet at all.
Every plan of QuickBooks Online includes it, Simple Start included. Running it takes about ten seconds. The part that takes judgment is deciding whether to believe it, because a balance sheet is only a rearrangement of the transactions sitting underneath it. A credit card that was never connected, three months of bank activity that never got imported, or a deposit categorized to an income account instead of a liability all produce a balance sheet that balances perfectly and is still wrong.
If whole months are missing because an account was never connected to the bank feed, or the account is closed and cannot be connected at all, convert the PDF statement into a Web Connect .qbo file with the tool at the top of this page, import it, and categorize the rows. A balance sheet cannot report on transactions that were never entered.
Here is what each section of the report is actually made of.
| Section | What sits there | Where the number comes from in QuickBooks |
|---|---|---|
| Current assets | Bank accounts, accounts receivable, undeposited funds, inventory, prepaid expenses | Bank and credit card registers, open invoices, and the Undeposited Funds account |
| Fixed assets | Vehicles, equipment, buildings, and the accumulated depreciation that offsets them | Asset purchases you categorized to a fixed asset account, plus depreciation journal entries |
| Other assets | Deposits, loans to shareholders, intangibles | Accounts you created with the Other Assets account type |
| Current liabilities | Credit cards, accounts payable, payroll taxes payable, sales tax payable | Credit card registers, open bills, and the payroll and sales tax modules |
| Long term liabilities | Loans, notes payable, the non current portion of financing | Loan accounts and the payments you split between principal and interest |
| Equity | Owner contributions and draws, retained earnings, opening balance equity, net income | Retained earnings is calculated by QuickBooks, not posted. Net income is pulled straight from the profit and loss for the period |
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Select Reports in the left navigation, open the Standard tab, and choose Balance Sheet under Business overview. Set the as of date, choose Cash or Accrual, then select Run report. Typing balance into the report search box is faster once you know the name.
Two settings change the answer more than anything else on the screen. The as of date decides which day the snapshot is taken on, and it is a single date rather than a range. The accounting method decides whether unpaid invoices and unpaid bills appear at all. Everything else in the Customize panel is presentation.
Once you have it the way you want it, select Save customization and name it. The saved version lands under the Custom reports tab and reopens with your date logic and your basis already applied, which matters if you run this every month.
Go to Reports > Company & Financial > Balance Sheet Standard on the top menu bar. Set the date in the As of field and use the Customize Report button to switch between cash and accrual on the Display tab. Report Center gives you the same report with a preview thumbnail if you prefer browsing.
Desktop ships several variants in that same menu. Balance Sheet Detail lists the individual transactions behind each account, Balance Sheet Summary collapses everything to account type totals, and Balance Sheet Prev Year Comparison puts this year and last year side by side with dollar and percent change columns. Memorize any of them with Ctrl+M so the customization sticks.
Under Reports in the left navigation, on the Standard tab, in the Business overview group at the top of the list. It sits next to the Profit and Loss and the Statement of Cash Flows, which together are the three financial statements QuickBooks generates for you.
If you cannot see the Reports link at all, you are signed in with a user role that does not include reporting access. A company admin can change that under Settings > Manage users. Reporting permissions are separate from banking permissions, so a user who can categorize transactions may still be locked out of the reports built from them.
It is called Balance Sheet. QuickBooks does not rename it. What confuses people is that the same document is called a statement of financial position by accountants and by most nonprofit boards, and lenders sometimes ask for a statement of assets and liabilities. All three phrases mean the report QuickBooks lists as Balance Sheet.
QuickBooks Online also ships Balance Sheet Comparison, Balance Sheet Detail and Balance Sheet Summary as separate entries in the report list. They are the same underlying data with different levels of detail, not different reports.
Run it on the basis you file taxes on, then run it the other way when you want the other answer. The switch does not change your books. It changes how QuickBooks presents them, and on a balance sheet it mostly decides whether accounts receivable and accounts payable show up at all.
| Cash basis balance sheet | Accrual basis balance sheet | |
|---|---|---|
| Accounts receivable | Usually zero or close to it. Unpaid invoices are removed | Shows every unpaid invoice as of the report date |
| Accounts payable | Usually zero. Unpaid bills are removed | Shows every unpaid bill as of the report date |
| Bank accounts | Identical on both. Cash is cash | Identical on both |
| Equity and retained earnings | Different, because net income differs between the two bases | Different, for the same reason |
| What it is good for | Matching a cash basis tax return | Loan applications, investor packets, and seeing what you actually owe and are owed |
This is also the single most common reason two people looking at the same company file quote different numbers to each other. Before arguing about a figure, check which basis each report was run on.
Because total assets no longer equal total liabilities plus equity, which in a double entry system should be impossible. The usual causes are data damage in a Desktop company file, a transaction whose links were broken by a crash or a bad import, a multicurrency or sales tax adjustment, or an equity account that was edited directly.
Start by running the report on both cash and accrual basis and note which one is out. An accrual basis imbalance in Desktop points at file damage, and the first move is File > Utilities > Verify Data followed by Rebuild Data. If only the cash basis version is out, or it is still out after a rebuild, the cause is a specific transaction and you narrow the date range by halves until you find the day it breaks.
QuickBooks Online has no rebuild utility, because there is no local file to repair. A genuine imbalance there is rare and usually turns out to be a display or caching problem rather than damaged data. Try an incognito window before you go looking for a broken transaction. The longer walkthrough lives in the guide to a QuickBooks balance sheet that is out of balance.
Three things as of one date: what the company owns, what it owes, and the difference between the two. Assets are listed first, in order of how quickly they turn into cash, then liabilities in order of when they come due, then equity. The bottom line of the report is not profit, it is the owners' stake in the business.
Net income appears inside the equity section, pulled directly from the profit and loss for the current fiscal year. That is the link between the two statements and it is worth knowing, because a balance sheet number that looks wrong in equity is often a QuickBooks profit and loss statement problem wearing a disguise.
Retained earnings works differently from every other account on the report. QuickBooks calculates it rather than storing it, rolling prior year net income into it automatically at the close of each fiscal year. You cannot open a register for it, and clicking the figure gives you a profit and loss by year instead.
Run the Balance Sheet, set the report period to cover the full range, then set the Display columns by dropdown to Months. QuickBooks rebuilds the report with one column per month end, so you see the balances marching forward date by date rather than a single snapshot.
This is the fastest way to find the month something went wrong. An account that sits at a sensible number for eleven columns and then jumps in the twelfth tells you exactly where to look, and clicking the number drills straight into the transactions behind it. The same dropdown offers weeks, quarters and years.
In QuickBooks Online, open the Balance Sheet Comparison report from the Standard tab, or run the standard Balance Sheet and turn on Previous period or Previous year in the Customize panel with the change and percent change checkboxes. In Desktop, use Balance Sheet Prev Year Comparison from the same Company & Financial menu.
Comparative columns are what a lender or a prospective buyer expects to see, because a single column has no context. A $40,000 accounts payable balance means nothing on its own and quite a lot next to last year's $12,000.
Run the standard Balance Sheet and set Display columns by to Class in the Customize panel. There is no separate balance sheet by class entry in the report list, and class tracking has to be switched on first under Settings > Account and settings > Advanced. It requires QuickBooks Online Plus or Advanced.
Expect a large Not Specified column, and know why before you go looking for the bug. Target lines carry the class you assigned, so a fixed asset or an inventory item lands in the right column. Source lines do not, so cash and accounts receivable fall into Not Specified. A balance sheet by class in QuickBooks Online is a useful view of some accounts, not a set of genuinely separate books per class.
Plus includes up to 40 combined tracked classes and locations. Advanced removes the limit. If you need true separation by entity rather than by class, that is a separate company file, not a report setting.
You do not build one. QuickBooks assembles the balance sheet from your chart of accounts and the transactions posted to it, so creating the report means running it. The work that decides whether it is right happens before you ever open the Reports menu.
Three things determine the quality of the output. Every account type has to be correct, because the account type is what decides which section of the balance sheet an account lands in. Every bank and credit card account has to be in QuickBooks, not just the ones with a working feed. And every transaction for the period has to be entered and categorized. Miss any of the three and the report will still balance, which is exactly what makes it dangerous.
Use the export icon in the report toolbar and choose Export to Excel or Export to PDF. PDF is what you send to a lender because the formatting holds. Excel is what you send to an accountant who intends to work with the numbers. The print icon sits next to it and there is an email option that attaches the PDF.
One habit worth building: export the PDF the moment you finish a period, not months later. A balance sheet is a snapshot as of a date, but it is generated live, so re running the same report next quarter after someone posts a backdated transaction gives a different answer for the same date. The saved PDF is the record of what you reported.
Because the balance sheet shows the QuickBooks register balance, which includes every transaction you have entered, while the bank shows only what has cleared. Outstanding checks and deposits in transit sit in the gap between the two. A difference is normal; a difference you cannot explain is not.
Reconcile the account through the statement date and the reconciliation screen will tell you the size of the gap and what is in it. If the difference will not resolve, the usual culprits are duplicate transactions from a feed that was connected twice, a manually entered transaction that the feed later downloaded again, or a period the feed never covered at all.
Timing and content. The profit and loss covers a period and reports income and expenses, ending in net income. The balance sheet reports one date and lists assets, liabilities and equity. Every account in your chart of accounts belongs to exactly one of the two reports, and the account type is what assigns it.
That split explains most of the confusion in small business bookkeeping. A loan payment mostly hits the balance sheet, because paying down principal reduces a liability, and only the interest portion reaches the profit and loss. An owner draw never touches the profit and loss at all. Buying a $30,000 truck does not create a $30,000 expense; it creates a fixed asset that reaches the profit and loss slowly as depreciation.
The two reports are joined at exactly one point. Net income from the profit and loss appears in the equity section of the balance sheet for the same fiscal year. If the two disagree, the reports were run on different bases or different date ranges.
In QuickBooks Online it is under Reports > Standard > Business overview > Statement of Cash Flows. In Desktop it is at Reports > Company & Financial > Statement of Cash Flows. It is the third financial statement and it explains the change in cash between two dates, split into operating, investing and financing activities.
One thing to know before you run it: QuickBooks builds the statement of cash flows on an accrual basis and the cash basis setting does not meaningfully change it. That surprises people who assume a cash flow report must be a cash basis report. The full walkthrough is in the guide to the QuickBooks statement of cash flows.
Yes. The Balance Sheet is a standard report on every QuickBooks Online plan, Simple Start included, along with the profit and loss and the statement of cash flows. Simple Start ships dozens of reports; what the higher plans add is class and location tracking, budgets, and the deeper analysis reports.
The features you lose at the Simple Start level that actually affect the balance sheet are class and location columns, inventory tracking, and multiple users. The report itself is the same report.
Reconcile every bank and credit card account through the report date first. A reconciled account is a statement by statement proof that what is in QuickBooks matches what the bank recorded, and a balance sheet built on reconciled accounts is the only version worth handing to a lender or a tax preparer. Reconcile first, run the report second.
The gap is almost always data that never arrived rather than data entered wrong. Bank feeds reach back a limited window when you first connect them, they break when a bank changes its login, and an account you have already closed cannot be connected at all. Every month that never made it into QuickBooks is simply absent from the balance sheet, and there is nothing on the report to hint that it is missing.
That is the case for converting the statements directly. Upload the PDF statements for the missing months at the top of this page, get a Web Connect .qbo file with the dates, descriptions and amounts intact, import it into QuickBooks and categorize the For review list. The accounts then reconcile, the asset and liability balances become real, and the equity section stops absorbing the difference. It works the same way for a closed account, a credit union QuickBooks cannot connect to, and a year of catch up work where the feed only reaches back ninety days.
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