Minutes before the board meeting, your CFO spots a $50,000 discrepancy. The deck is final, but the numbers are off. The story doesn’t lie. And the room, full of investors,goes quiet.
It’s not that the model was wrong. The work was there. But somewhere, a transaction slipped through. Just a small one, but big enough to break the narrative.
This is exactly what a trial balance is meant to catch.
It’s the checkpoint before things get public.
A single report that shows whether your debits and credits still line up, and where they don’t.
Not just to protect your financials, but your credibility.
The trial balance, explained
So what is a trial balance? Just an internal accounting report that lists the balance of every account in your general ledger—on one page, as of a specific date.
And it does one thing really well: it confirms whether the books are still balanced.
In double-entry accounting, every transaction hits at least two accounts—one debit, one credit. If the books are right, the total debits and total credits should match. The trial balance is where you check.
You’ll usually generate three kinds across the close process:
- Unadjusted trial balance: Pulled directly from your general ledger before any period-end adjustments. It helps catch obvious mistakes early—like missing entries or typos—before the cleanup begins.
- Adjusted trial balance: Generated after you’ve added accruals, deferrals, depreciation, amortization, and other end-of-period adjustments. This version is what you use to prep the actual financial statements.
- Post-closing trial balance: Prepared after closing out temporary accounts (revenue, expense, gains/losses). What’s left: assets, liabilities, equity. A clean starting point for the next period.
If the trial balance doesn’t tie, the work stops. Because until it does, nothing else can be trusted.
Why trial balance matters
You don’t get extra credit for having a trial balance. But you lose a lot when you don’t.
A solid trial balance:
- Catches math errors before they show up in board decks.
- Surfaces missing or double entries while there’s still time to fix them.
- Demonstrates operational rigor to auditors, investors, and your own team.
- Provides a single point of truth for cash, AR/AP, spending trends, and balance sheet health.
- Enables faster, more confident planning based on real numbers.
More than anything, it buys you confidence. The kind that keeps your voice steady when someone asks, “Are we sure about this?”
What you’ll see on a trial balance
A good trial balance is simple by design. One report, many accounts, two columns: debit and credit. Here’s what it includes:
- Header with company name and “as of” date
- Every active account from your chart of accounts
- Normal balances for each (e.g., assets = debit, liabilities = credit)
- Clear totals at the bottom—both sides must match
It’s organized by account type:
- Assets: cash and cash equivalents, accounts receivable, inventory, prepaid expenses, fixed assets, right-of-use assets, and intangible assets. You’ll also see contra-asset accounts like accumulated depreciation and allowance for doubtful accounts (they carry credit balances and reduce assets).
- Liabilities: accounts payable, credit cards, accrued expenses, payroll liabilities, unearned/deferred revenue, leases, notes and loans payable, and taxes payable. Contra-liability accounts can appear too (for example, debt issuance costs).
- Equity: common stock or members’ capital, additional paid-in capital, retained earnings, treasury stock, and current-period net income (before close). Owner draws or distributions show here until you close the period.
- Revenues: product sales, service revenue, subscription or recurring revenue, usage fees, and other operating income. You may also see discounts and returns as contra-revenue.
- Cost of goods sold: direct costs tied to revenue, like materials, freight-in, and direct labor.
- Operating expenses: salaries and wages, benefits, rent, software, marketing, professional fees, insurance, travel, and utilities.
- Other income and expenses: interest income, interest expense, gains or losses on asset disposals, foreign exchange, and fair value adjustments.
Let's see this in a real-life example.
Example: constructing a basic trial balance
Let’s build a trial balance for a consulting firm. First, pull balances from your general ledger for the date you need.
Your trial balance might look like this:
The Consulting Co. — Trial Balance (as of Sept 30, 2025)
- Cash: $25,000 (debit)
- Accounts receivable: $8,500 (debit)
- Office equipment: $15,000 (debit)
- Accounts payable: $3,200 (credit)
- Bank loan: $10,000 (credit)
- Owner’s capital: $20,000 (credit)
- Consulting revenue: $18,000 (credit)
- Rent expense: $2,400 (debit)
- Utilities expense: $300 (debit)
Total debits: $51,200.
Total credits: $51,200.
When debits and credits match, your trial balance is solid. You can move forward and build financials with confidence.
How Runway simplifies trial balance work
Most teams prepare trial balances in spreadsheets. They export from the GL, clean it up, organize the accounts, verify formulas, double-check mappings, and manually look for errors.
It works—until it doesn’t.
That’s where Runway changes everything. It connects to your accounting systems and automates the manual work. You can:
- Run revenue forecasting scenarios to find growth opportunities.
- Manage and analyze expenses to keep costs under control.
- Plan headcount and see the financial impact of hiring.
No more copying data from place to place. You get clean, comprehensive financial views for confident trial balance analysis.
Runway links to 750+ sources, including QuickBooks, Xero, NetSuite, and Sage Intacct, meaning your trial balance data stays up to date automatically.
Preparing your data for Runway
Connect your general ledger to Runway using the built-in integrations. The platform pulls your chart of accounts, full history, and balances on its own.
Make sure account names, transaction dates, and amounts all line up. Adjust as needed — it’s flexible.
Building a P&L hierarchy for a comprehensive trial balance
Runway helps you build layers of detail that match how you work. Start with every transaction: by vendor, account, or department.
Roll up transactions by groups—vendor, then GL account, then department, then high-level reporting like revenue or expenses.
Map accounts into your custom categories. Group any way you want—the structure’s up to you, not your accounting software.
Using reporting categories and drill-in features
Drill in from summary to transaction level to chase down any number. See which vendor, team, or entry drives a balance. No need to juggle extra reports.
Catch an outlier? Click into the hierarchy and trace it right to its roots. Find patterns fast. Identify what’s moving your numbers.
Create custom reports organized around how your team thinks about the business. Make trial balances accessible for every department.
Using collaborative, audit-friendly workflows
Comments and context live next to the numbers.
Everyone sees the same version. Everyone understands the why.
And when the auditor asks “why is this expense up 30%?” you don’t have to go hunting for it. You hover over a sell to see the assumption. You answer. You move on.
Fast-moving teams trust Runway for accuracy
Runway powers financial planning at startups and big companies alike. Founded in 2020 with backing from Garry Tan, a16z, and Dylan Field, it works for companies of all sizes. Read our customer stories to see how Runway cuts manual work and increases accuracy.
Best practices: Getting the most out of your trial balance
- Connect your source systems. Don’t rely on stale data. Let your GL feed the truth.
- Keep your chart of accounts clean. The clearer your structure, the easier it is to spot issues.
- Use review checkpoints. Build a repeatable process: run → review → reconcile.
- Drill from totals to transactions. Don’t just look at the number—ask what drives it.
- Close before you forecast. A clean close means confident plans.
Runway can help you do all of this in a modern, intuitive interface.
Stay close to the truth
A trial balance doesn’t tell the whole story, but it tells you whether the story is still intact.
When debits and credits match, you know the foundation is solid.
When they don’t, you know exactly where to look.
Runway helps you get there faster—with automation, clarity, and context built in. So your close moves quicker, your plans stay grounded, and your team walks into the boardroom with confidence.
See it in action. Book a demo and simplify trial balance prep from close to forecast.