Balance Sheet Assistance for Wendell Businesses

The financial soundness of your business lies in knowing that your assets and liabilities are accurately accounted for, and a balance sheet is a tool that can provide you with the information you need. Often called a “Statement of Financial Position,” a balance sheet pulls all of your company’s assets, liabilities and owner’s equity into one form to determine the your business’s current net worth.

A balance sheet is a major part of the greater financial statements report for any business.

What Does a Balance Sheet for Your Wendell Business Require?

Balance sheets from wendell small business accountantsAll businesses needs to have a properly managed balance sheet that includes accurate details listing the unique assets, liabilities and equity of their specific industry.

Assets

Your assets are the resources you’ve acquired that have a measurable economic value.

Assets are typically divided into 2 categories:

Liquid – Cash or easily sold/converted to cash

Non-liquid – Not easily converted into cash assets

Examples of Assets

  • Cash or equivalent
  • Investment
  • Accounts receivable
  • Inventory
  • Supplies
  • Pre-paid insurance
  • Land
  • Buildings
  • Equipment

Liabilities

Your business has costs or obligations associated with operating. These costs are defined as liabilities and are usually owed to creditors, stockholders, etc.

Liabilities are divided into the categories of:

Current – Must be paid within a single year

Long Term – Payoff due outside of a single year cycle

Examples of Liabilities

  • Accounts payable (buying supplies or paying utilities on office space)
  • Salaries/Wages
  • Interest owed on loans, materials, etc.
  • Income tax
  • Bonds
  • Expenses
  • Loans

Equity

After subtracting all of your business liabilities from the assets, you should now know your Equity or Shareholders’ Equity if incorporated. This can be considered the value of the company. The lower the expenses compared to revenue, the more equity you have.

Why are Balance Sheets Important?

A balance sheet provides a clear snapshot of your financial health to banks, investors, or shareholders at any given time. If you want to scale or grow your business and want to take out a loan to make it happen, then a bank or credit agency will look at the balance sheet to determine if you can repay the debt based on your business’s revenue.

Who Reviews a Balance Sheet?

Anyone with a stake in your business’s success or struggles will have a need to review a balance sheet such as:

  • Current and Potential Investors
  • Labor Unions
  • Government Agencies
  • Banks/Creditors
  • Company Management/Financial Officers

Need Help with Generating Your Wendell Company’s Balance Sheet?

At C.E. Thorn, CPA, PLLC, we have a great deal of experience in generating balance sheets and reviewing them in an advisory capacity. For nearly 30 years, we have provided support to local small businesses needing help with accurate bookkeeping and generating income statements.

Give us a call to speak with an experienced small business accountant for Wendell by calling 919-420-0092 or completing the online contact form today.

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