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 why you prepare a trial balance. It serves as the checkpoint before things get public.
You need a single report that shows whether your debits and credits still line up. You need to know where they don't. This protects your financial statements and your credibility.
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? It is an internal accounting report that lists the ending balance of every account in your general ledger. It fits on one page and reflects a specific date.
It does one thing really well. It confirms whether the books are balanced.
In double entry accounting, every transaction hits at least two accounts. You have one debit and one credit. If the books are right, the total debits and total credits should match. The trial balance is where you check this logic.
You usually generate three kinds of reports across the close process:
- Unadjusted trial balance: Pulled directly from your general ledger before any period-end adjustments. It helps catch obvious mistakes like missing entries or typos early, 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 ensures your financial statements are accurate. It:
- 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. It is one report with many ledger accounts and two columns: debit and credit. Here is what it includes:
- Header with company name and date.
- Every active account from your chart of accounts.
- Normal balances for each account. Assets generally have debit balances while liabilities have credit balances.
- Clear totals at the bottom where debits and credits must match.
It’s organized by account type:
- Assets: Cash, accounts receivable, inventory, and fixed assets. You will also see contra-asset accounts like accumulated depreciation. These carry credit balances and reduce the asset value on the balance sheet.
- Liabilities: Accounts payable, credit cards, and accrued expenses. These accounts usually show credit balances.
- Equity: Common stock, retained earnings, and current-period net income. These appear on the balance sheet and typically carry credit balances.
- Revenues: Product sales and service revenue. These are temporary accounts with credit balances.
- Cost of goods sold: Direct costs tied to revenue. These have debit balances.
- Operating expenses: Salaries, rent, and software. These have debit balances.
- Other income and expenses: Interest and gains or losses.
Example: constructing a basic trial balance
Let's look at a real-life example. We will build a trial balance for a consulting firm. First, you pull balances from your ledger accounts for the specific 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 total debits and total credits match, your trial balance is solid. You can move forward and build your financial statements 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.
Runway changes this. It connects to your accounting systems to automate the manual work found in double entry accounting. 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. 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. See which entry drives a balance. You do not need to juggle extra reports to understand your adjusted trial balance.
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. Make your trial balance and financial statements accessible for every department.
Using collaborative, audit-friendly workflows
Comments and context live next to the numbers.
Everyone sees the same version. Everyone understands why a debit and credit entry exists.
When an auditor asks why an expense jumped, you do not have to hunt for the answer. Hover over a cell to see the assumption. Answer the question. Move on.
Fast-moving teams trust Runway for accuracy
Runway powers financial planning for forward-thinking teams. 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. Manual data entry creates errors. Stop relying on static exports or stale spreadsheets. Connect your general ledger directly to your reporting tools to feed the truth to your trial balance. This integration ensures you always work with real-time numbers and eliminates version control issues.
- Keep your chart of accounts clean. A messy list of accounts hides expensive mistakes. Maintain a logical, standardized structure for your assets, liabilities, and expenses. A clean architecture makes it much easier to spot misclassified transactions or duplicate ledger accounts during your review.
- Use review checkpoints. Consistency prevents panic during the close. Build a repeatable process into your accounting cycle. Run the report, verify that total debits equal total credits, and reconcile individual account balances against bank statements. Catching discrepancies here saves you hours when preparing final financial statements.
- Drill from totals to transactions. Summary numbers only tell half the story. If a balance looks off, you need to know why immediately. Don't just stare at the aggregate credit balance or debit total. Dig into the specific journal entries and invoices driving those numbers to understand the operational context.
- Close before you forecast. You cannot build accurate plans on shifting historical data. Finish your adjusting entries and lock the period first. A clean post-closing trial balance provides the solid baseline you need to build confident scenarios and reliable forward-looking models.
Runway helps you do all of this in a modern, intuitive interface. It connects to your live data to save you from manual updates. It gives scrappy finance teams and model owners the control they need to analyze details and plan for the future without getting stuck in spreadsheets.
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 do not, you know where to look. You can fix the issue before it hits the balance sheet.
Runway helps you get there faster. You get automation and clarity built in. Your close moves quicker. Your plans stay grounded. Your team walks into the boardroom with confidence in the financial statements.
See it in action. Book a demo and simplify trial balance prep from close to forecast.