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Deep Dive: Why does my Expensify Card Liability Account have a balance?
If you’re using the Expensify Card with an accounting system that supports Auto-Reconciliation (QuickBooks Online, NetSuite, Xero and Sage Intacct), your Expensify Card Liability Account balance should always be $0 in your accounting system.
If you see that your Expensify Card Liability Account balance isn’t $0, then you’ll need to take action to return that balance to $0. Let’s talk through two reasons why that balance might not be $0, and how to fix it.
You were using the Expensify Card before Auto-Reconciliation was available/enabled with your accounting system
If you were using Expensify Cards before Auto-Reconciliation was enabled for your accounting system, then any expenses which occurred prior will not be cleared from the Liability Account.
You will need to prepare a manual journal entry for the approved amount to bring the balance to $0.
There’s a balance in the Liability Account from an issue with a negative daily settlement or a refunded transaction
In the past, refunded transactions or negative daily settlements (which happen when there's a refund to your company for a day’s Expensify Card use) were, at times, not handled correctly through Auto-Reconciliation. We’re sorry for that!
Depending on where you were coding your daily settlement bank account withdrawals, these may need to be re-coded, or a journal entry prepared, to move the relevant amounts to the Liability Account so the balance is $0.
Solving both of these issues
The solution to both of these issues is:
- Find the earliest date of a transaction entry in the Liability Account that doesn’t have a matching entry (each expense will have one negative and one positive entry in the Liability Account which net each other off to $0).
- Go to the GL account that your daily Expensify Card settlement withdrawals are posted to and find each entry for those dates.
- Recode each settlement to post to the Clearing Account.
- Create a Journal Entry or Receive Money Transaction to “pay off” the balance in the Liability Account with the funds that are now sitting in the Clearing Account after step 2.