You may find it necessary, occasionally, to change a general ledger account number or account type.

Doing this incorrectly may make the general ledger, and therefore the general ledger trial balance, go out of balance.

Sometimes, via the proper use of Sage50 diagnostic and repair tools, “Data Verification” and “Integrity Check”, we can correct the out of balance situation, and sometimes these tools do not fix the imbalance.

If and when these diagnostic tools do not work, we would send your database to a repair service which can make the needed repairs. These repairs must be prepaid,  and are sent directly to the repair service. They can usually perform an overnight or weekend repair.

We do not recommend our clients running “Data Verification” or “Integrity Check” on a routine basis. They should both be run in a strictly controlled atmosphere with proper backups being made and labeled. These tests, if not run properly, can “crash” or corrupt your database.

TriStar Data Systems is always available to run these diagnostic and repair tools for you, or to help coordinate with the repair service.

Scenario #1

Account #3900, dividend payments with a balance of $120,000 was incorrectly labeled as an equity-doesn’t close account.  This account type is usually reserved for common stock and additional paid in capital (APIC). You cannot just change the account type.

The proper method of correcting this is to set up a new account, #3950 dividend payments, with the account type “equity-gets closed”.

Via a general journal entry: debit #3950 for $120,000 and credit #3900 for $120,000.

Then make account #3900 inactive.

If your system is set up properly, when trying to post a transaction to an inactive account you should receive a warning stating that it is an inactive account.

Scenario #2

Account #7450, with a balance of $10,750, is used to track Workers Compensation insurance expenses and is in the payroll expense category.

Management wants to show all insurance expenses in a group which uses account numbers from #8600 to #8610. Account #8610 is unassigned.

Instead of just changing the account number from #7450 to #8610, we suggest assigning #8610 as Workers Compensation. Then via a general journal entry, debit #8610 for $10,750 and credit #7450 for $10,750.

Then make account #7450 inactive.

Scenario #3

Account #6250, shop supplies, is an expense account with a current credit balance of $5,600. This account will always have a credit balance due to customers being invoiced separately for shop supplies and rebates from shop supply vendors. Management wants this account to be an income account.

Instead of just changing the account type, set up a new income account #4190 shop supplies.

Via a general journal entry debit account #6250 shop supplies for $$5,600 and credit account #4190 shop supplies for $5,600.

Make account #6250 inactive.

If you are using a custom balance sheet or income statement format, these changes may require some adjustments to the statements.

Customized financial statements are driven by a carefully organized chart of accounts. These statements can help to present more meaningful and tailored reports enabling company managers and owners to better achieve their goals.