What Is a Trial Balance (And Why It Matters for Small Businesses)

The words “trial balance” might sound intimidating, but this report is one of the most useful tools in your bookkeeping toolkit. If you’re running a startup, small business, or Indigenous organization, understanding your trial balance can help you stay accurate and audit-ready.

Let’s break it down in simple terms.

What Is a Trial Balance?

A trial balance is a report that lists every account in your books—and shows the total debits and credits in each. It acts like a financial balance check to make sure your books are mathematically correct.

Each line includes:

• Account name (e.g., Bank, Sales, Rent)

• Debit or credit balance

• Running total for the period

If your debits and credits don’t match, something’s off.

Why It Matters for Business Owners

You don’t need to memorize accounting rules, but you should know this:

• A balanced trial balance = your books are likely accurate

• It’s the foundation for creating year-end reports (e.g., income statement, balance sheet)

• It helps catch mistakes early—before you file taxes or submit reports

Your accountant or bookkeeper will use this to prepare year-end filings and tax returns.

What Can Go Wrong?

An unbalanced trial balance can be caused by:

• A missing or duplicated entry

• A transaction posted to the wrong side (debit vs. credit)

• Manual edits without journal entries

These mistakes create confusion at tax time—or worse, trigger CRA red flags.

Indigenous Business Tip

For Indigenous councils and non-profits, a clean trial balance ensures:

• Accuracy in funding program tracking

• Confidence in audit or community presentations

• Compliance with legislation like the TH Financial Administration Act

The trial balance is your behind-the-scenes check for transparent governance.

How to Access Your Trial Balance

If you're using QuickBooks Online, you can find it under:

Reports > Trial Balance > Select the period (month, quarter, year)

Have your bookkeeper walk you through it—or schedule a paid diagnostic review to check for hidden errors.