You may have to adjust the small wheel that runs in the grove of the bigger encoder wheel. There are 2 of these wheels. One runs the horizontal direction and one runs the verticle direction. Try using your finger to turn the small wheel and see if it slips with out turning the larger wheel. There is a bolt on the under side of the bigger wheel with the grove. I have had to loosen the bolt with a socket wrench and squeeze the two wheels tighter together. I usually have to have my husband help me because it is an on the floor job needing 4 hands. They are hard to get at and one needs an open end wrench and one takes a socket wrench. I finally bought 2 wrenches just for my machine after having to dig through the piles of my husband's farm tools too many times! Don't tighten the wheels too much either or the machine gets too tight and your circles might become more like squares. As my machine is getting older I have had to mess with this more.
I upgrades to the Bliss wheels and have had to replace all my wheels once. In fact if you go to the trouble of taking the encoder wheels apart entirely, if the have a yellow tab in the center of the wheel, APQS might replace all your big wheels with the groove in it for free because there was a recall?? You can't see the yellow tab until you take the wheel off because it is on the top side of the wheel. I did have to purchase 2 new little encoder wheels because they do wear down with use.
I hope this makes sence and helps!