A loan balance that doesn't change year to year is a red flag: it means you haven't recorded the interest expense. This causes you to overpay taxes and lose track of when the loan gets paid off. The example shows a $10,000 balance sitting unchanged from 2022 to 2023 despite making payments.
If you have the same loan balance from last year to this year, that's a red flag. It means you're not capturing your interest expense properly, which is meaning you're paying more in taxes. It also means you can't see the trend of when that loan will actually be paid off. So loan balances. So 2022, my loan balance is $10,000, and in 2023 it also says $10,000. But I've been making payments the whole time, likely not. The real outcome, my bookkeeping needs to be updated.
