When you open the Balance Sheet in Aicountly Smart Books, you may notice that the figure on the Profit & Loss Account line is different from the net profit or loss on your Profit & Loss report. Nothing is wrong. This article explains why the two numbers can differ and how to see exactly what makes up the Balance Sheet figure.
What the line is made of
If some of your income or expense accounts carry an opening balance at the start of the financial year, the Balance Sheet line is the total of two parts. Smart Books now shows both parts under the line, so you can see them separately:
- Opening Balance (brought forward): the profit or loss carried in from income and expense accounts that have an opening balance for the year. Under it, Smart Books lists each of those accounts with its amount.
- Current Period: the result of the year you are viewing. This is the same figure that the Profit & Loss report shows.
Add the two parts together and you get the amount on the Profit & Loss Account line. The Profit & Loss report shows only the current year's result, which is why it can look smaller or different. Both numbers are correct. They simply answer different questions.
How to check the figures
- Open the Balance Sheet report from the Reports area.
- Choose the financial year or date range you want to look at.
- Find the Profit & Loss Account line and expand it.
- Read Opening Balance (brought forward). Expand it to see each income or expense account that holds an opening balance, along with its amount.
- Read Current Period. Compare it with the net profit or loss on your Profit & Loss report for the same dates. They should match.
- To look closer at one of the opening accounts, use the Account Ledger icon beside it to open that account's ledger.
Why would an income or expense account have an opening balance?
Normally, income and expense accounts start each year at zero, because the previous year's result moves into the Balance Sheet. If an account was set up with an opening balance for the year, for example when you moved from another accounting system, that amount is treated as profit or loss brought forward. It then appears under Opening Balance (brought forward).
What stays the same
Showing the two parts does not change your totals. The Profit & Loss Account line, the Balance Sheet totals and the printed report give the same amounts as before. Only the breakdown under the line is new.
If the numbers still look wrong
- Make sure the Balance Sheet and the Profit & Loss report use the same financial year and dates.
- If Opening Balance (brought forward) is not what you expect, open the listed accounts one by one and check their opening balances.
- If there is no Opening Balance line, none of your income or expense accounts carry an opening balance, and the whole figure is the current period's result.