Deep Dive: Why does my Expensify Card Liability Account have a balance?

Conor Pendergrast
Conor Pendergrast Expensify Success Coach - Admin, Expensify Team, Expensify Student Ambassador Posts: 175 Expensify Team
edited March 2021 in Deep Dive Docs

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: 

  1. 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).
  2. Go to the GL account that your daily Expensify Card settlement withdrawals are posted to and find each entry for those dates.
  3. Recode each settlement to post to the Clearing Account.
  4. 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.