Understanding Your Balance Sheet
The Balance Sheet is one of the most important statements used by business owners and accountants as it is provides an indication of a overall company’s financial position at a specific point in time. It allows its reader to see what a company both owns (Assets) and owes to other parties (Liabilities). This information may be of interest to not only a business owner or management team, but also to a current or potential lender, creditor, investor, business analyst or government agency. So, what are you likely to see listed as Assets and Liabilities?
The items that appear under ‘Assets’ on a Balance Sheet are the resources with a future economic value that are owned by a company, and which can be expressed in dollars. These will include land, buildings, vehicles, inventory, investments, plant and equipment, cash and monies owing from customers (debtors). Your balance sheet will usually break Assets into Current Assets (these may be converted into cash with 12 months), and Non-Current Assets (may be converted into cash in a period beyond 12 months).
Liabilities are obligations of a company – the amounts owed to creditors for a past transaction. Your Balance Sheet will reflect bank loans, lease agreements, business credit cards, provision for income tax, GST liability, PAYG wages tax payable and monies owed to suppliers (creditors).
Bookkeeping and Accounting
Keeping up to date with your bookkeeping it vital if you are to conduct business in a professional way. However, many people do not have the desire or skills that enable them to keep on top of their day to day accounts. And this is hardly surprising – they are too busy creating profitable businesses. Successful business people understand the need to focus on their core competencies: plumbers on plumbing, doctors on the provision of health care, and farmers on their crops and livestock. By engaging the services of professional bookkeeping services to manage their day to day accounts, deliver an accurate balance sheet and compile other financial reports, they ensure that there are no surprises or last minute panic come BAS or tax time.
Online Bookkeeping Gives Instant Access
The days of requesting a balance sheet or financial statement from your accountant and waiting days or weeks for their delivery are long gone. Bookkeeping in Australia has had a complete facelift, with online accounting allowing your accounts to be hosted on the internet – with you, your bookkeeper and your accountant having secure access from any computer with online access. Engaging a remote bookkeeper to manage your accounts online makes sound business sense. Rather than employing specialist on-site staff to manage this important part of your business, or suffering the stress of trying to do it yourself, you can monitor your accounts and check your latest balance sheet by logging into your online accounting program, 24 hours a day, 7 days a week. Even when working remotely, however, it is important to have a good relationship with your bookkeeper and confidence that they are qualified to be entrusted with the recording your business’ financial transactions. The experienced team at Jet Bookkeeping is ready now to explain just how they can help you to streamline your business, take the pain out of your financial record-keeping, and ensuring your Balance Sheet and other financial records are accurate and up to date.