Trial balance (bookkeeping)
A trial balance or proefbalans in bookkeeping is a financial report that lists all the general ledger accounts of a business at a specific point in time, showing the account balances of both debits and credits. It is used to ensure that the total of all debits equals the total of all credits, which confirms that the accounting system is mathematically correct.
If the debits and credits match, it suggests that the books are balanced, although this does not guarantee the absence of other errors, like misclassification or omission of transactions. A trial balance is often prepared at the end of an accounting period (monthly, quarterly, or annually) and can serve as the basis for creating the official financial statements, such as the balance sheet and profit and loss statement (P&L).
Example: Dutch ZZP
For a Dutch ZZP, the trial balance would include:
- Assets (e.g., bank accounts, equipment)
- Liabilities (e.g., outstanding bills, loans)
- Equity (e.g., your capital in the business)
- Revenue (e.g., sales or income from services)
- Expenses (e.g., office supplies, travel, marketing)
More than just checking transactions
Each transaction in the general ledger, already has three verification columns: Sum of debit; sum of credit; sum of debit minus sum of credit.
However, a trial balance serves a broader purpose than just checking individual transactions — it helps verify that all accounts across your entire administration are balanced at a given point in time. Even though each individual transaction might balance, compiling a separate trial balance at the end of a period (e.g., monthly or annually) can give you an overall snapshot of your business’s financial health. This ensures that no errors, omissions, or misclassifications have slipped through.