Checking a Zoho Books file: what to look at first, and why

When the opening debits and credits entered on day one do not agree, Zoho Books parks the difference in an account called Opening Balance Adjustments so that the books still balance. Open the trial balance as on any date and look for it.

A balance there means the starting numbers were incomplete or entered on the wrong side: a party balance with the opposite Dr/Cr, a bank account added after the opening balances, or receivables entered as one figure per customer instead of invoice by invoice. Every report since has carried that difference.

If the file came from Tally, our guide on trial balance mismatches walks through the causes in order.

Suspense is meant to be a waiting room for a few days. In many files it is where every bank line nobody could identify has gone for months. Look at its balance, and at the count of uncategorised bank feed entries on each account.

The usual story behind a large Suspense balance: customer payments recorded but never applied to their invoices. The customer has paid, Zoho Books still shows the invoice as open, and reminders keep going out. Clearing Suspense often fixes receivables at the same time.

Check every bank, credit card and wallet account, not just the main current account. The date of the last completed reconciliation tells you how far behind the file is. More than a month behind on any active account means the balances in your reports are not confirmed.

Look for the same payment entered twice, once by hand and once through the feed, and for payment gateway settlements booked at the net amount with the charges missing.

Zoho Books calculates tax from the settings on the customer, the vendor and the item. A wrong setting does not produce one wrong invoice; it produces the same mistake on every invoice since. That is why tax comes before reports.

• GSTR-1 for the last three filed months against the sales register in Zoho Books.
• Input credit claimed against GSTR-2B, bill by bill. Our free GSTR-2B tool does this from a Zoho Books bill export.
• Place of supply on inter-state invoices. CGST and SGST where IGST was due is the most expensive mistake on this list, because it has to be paid again under the right head.
• HSN or SAC codes on items, with the number of digits your turnover requires.
• Reverse charge bills: transport, advocate fees, rent from an unregistered landlord.
• E-invoicing switched on if your turnover requires it.

Scroll the chart of accounts for duplicates such as "Electricity", "Electricity Charges" and "EB Charges". Each one splits the same cost three ways and makes the P&L harder to read.

Then check account types. A laptop booked to office expenses, or a loan received booked as income, changes the profit and the balance sheet at the same time. These are quick to spot in the trial balance once you look for them.

Filter items for negative stock. Stock cannot go below zero on a shelf, so a negative figure means a purchase was missed, entered late, or entered against a different item. The same item created twice under slightly different names is a common cause.

Pick five items and count them. If the shelf and Zoho disagree, the stock value in the balance sheet is wrong by at least that much.

Look at who has admin access. Two is usually enough. Anyone who has left should already be off the list, and your CA should have their own accountant login rather than receiving exports.

Then check transaction locking. Once a month's returns are filed, the month should be locked so that nobody can edit an invoice in it. If an old invoice was edited after filing, the books and the filed return no longer agree.