Skip to content

Liability Balance


What: This insight will flag up when you have a liability account where the balance on the account is actually a debit balance.  If the debit balance is more than 1 we will round the result and if it is less than one we will show the whole number as shown above.

When: This checks the Trial Balance report everyday.


  1. The obvious explanation here is is to check for mispostings.  If you have a debit balance on a liability account it would normally imply that something has been posted here that belongs elsewhere.
  2. It could indicate that you need to update your chart of account as this account code should actually be in the assets section of your balance sheet.
  3. There is also the option that your records are incomplete such as when loan or hire purchase payments are being posted to the balance sheet but in fact the opening corresponding loan or asset purchase has not yet been included in the accounts.

In the example above we might be seeing this as we paid more for our tax than the corresponding journal entry, perhaps a small amount of interest was paid and this needs adjusting.  It could represent a misposting or perhaps the original journal posted was incorrect and needs adjusting.  Another option would be this year we are expecting a refund of corporation tax.

How:  We scan your accounts for any account codes that are mapped as a liability account and then cross reference the balance on that account to see if the running balance is a debit balance.  If it is then this will trigger an alert.


There are three options here:

  1. Double check the account code in question and make any correcting adjustments and click the Complete button
  2. Amend your Chart of Accounts in Xero if the account code is now going to be an asset code moving forward and click the Complete button
  3. Accept that the account code could float between assets and liabilities, such as VAT and click the Exclude button to remove it from future checks

Additional Resources

Xero – Edit Chart of Accounts

Last Reviewed: