A trial balance is a bookkeeping report that lists the closing debit and credit balances of every account in the general ledger at a given date, with the two columns expected to total to the same figure. It is used to check the arithmetical accuracy of the double-entry records before preparing the financial statements.
What the Trial Balance is
A trial balance lists every account in your bookkeeping with its closing debit or credit balance at a chosen date, usually the year end. In Tax Optimiser, the Trial Balance is the screen in each accounting period where those year-end balances are brought in. It is the starting point for everything that follows: the statutory accounts, the Corporation Tax computation and the CT600 are all built from it.
Who should use it
The Trial Balance is the first step in preparing a period in Tax Optimiser. It is used by:
- Companies preparing statutory accounts for Companies House and a Corporation Tax return for HMRC.
- Charities and members' clubs that file a CT600. Their computation is built from a trial balance in the same way.
- Accountants and bookkeepers preparing a client's period, checking the balances and recording their evidence in working papers.
Getting your figures in
Open your accounting period and choose Trial Balance from the left menu. On a period with no figures yet, you choose how to bring them in:
- Connect your bookkeeping software – connect Xero or QuickBooks once and the trial balance syncs for this and every later period.
- Import from a spreadsheet – upload a trial balance exported from another bookkeeping system as Excel or CSV.
- Manual Entry – type a debit or credit balance against each account.
- Simple Entry – numbered boxes for a small company preparing micro-entity (FRS 105) accounts.
Whichever you pick, the figures land in the same trial balance. See Getting your figures in for help choosing, and Import a trial balance from a spreadsheet for the import step by step.
Understanding the columns
In Manual Entry the accounts are grouped under the same headings as the statutory accounts. Each account row has four columns:
- Debit – the closing debit balance for the current year.
- Credit – the closing credit balance for the current year.
- Comp Debit and Comp Credit – the same balances for the comparative year.
Every section shows a running total, and the Grand Total at the bottom must show equal debits and credits for each year.
Which accounts usually appear as debits or credits
- Debit balances typically include assets (bank, debtors, fixed assets) and expenses.
- Credit balances typically include liabilities (creditors, loans, VAT owed), equity and income.
Looking into a balance
Each line of the trial balance is a single closing balance. If one looks unexpected, check it against the bookkeeping system or spreadsheet the figures came from, where the invoices, receipts and bank entries are kept. Correct any bookkeeping errors there, then sync or import again. Importing a corrected file replaces the imported figures, including the amounts that earlier journals added, so put those adjustments in the corrected file or post the journals again.
The three icons at the end of each line let you add a note, raise a review point and attach supporting documents to that balance. See Working through the trial balance.
Using the Trial Balance to check your bookkeeping
Before relying on the report for tax or year-end work, it's good practice to run through a few checks:
- Confirm the debit and credit totals match at the foot of the report.
- Look for accounts with unusual signs, such as a bank account showing a credit balance when it should be in debit.
- Compare balances to the previous period and investigate large or unexpected movements.
- Check that control accounts (for example debtors, creditors, VAT and PAYE) agree with their supporting ledgers or returns.
- Make sure all bank and credit card accounts have been reconciled up to the period end.
A clean Trial Balance is the foundation of accurate accounts. Time spent reviewing it now will save time correcting figures later.
Adjusting and exporting the figures
Year-end adjustments are made on the Trial Balance screen. Post a journal for a real adjustment to the books, such as an accrual or a supplier invoice that arrived late. Use a presentation journal for rounding, or to show a balance on a different line of the accounts. Export Trial Balance downloads the figures you imported.
Heads up - If you're an accountant working on a client file, check the Trial Balance early in your review. It often highlights areas that need attention before you begin detailed work on the accounts or tax return.
Next steps
Once you're happy that the Trial Balance is accurate, you can move on to the statutory accounts and the Corporation Tax computation within Tax Optimiser, confident that the underlying figures are reliable.
Read more: Getting your numbers in: the trial balance and Building the Corporation Tax computation.
