Understanding the Balance Sheet

Of the Big Three Financial Statements, the balance sheet is the only one to offer a comprehensive view of your company’s overall financial standing at a given time. These statements detail your company’s assets, liabilities, and owner’s equity at a specific point in time. It’s particularly useful in gaining understanding and insight into what is owed versus what is owned.

With inDinero, you can quickly discern your company’s financial health with real-time data compiled in your Balance Sheet. 

For example, Jane Smith at Lyon’s Den is looking to purchase new equipment for her business and needs a quick understanding of what is already owned and any outstanding invoices to determine if this is the right time for a major purchase.

Step 1: On the left navigation, hover over Reports and click Balance Sheet.

Step 2: Adjust the Period and Date Range, in the top panel, to focus on a particular time frame. Here, Jane adjusts the Period to Quarterly and the Date Range to Last quarter.

Click Update to see the changes reflected on the Balance Sheet.

Every Balance Sheet is divided into three categories:

• Assets: What a business owns.
• Liability: What a business owes.
• Equity: What percentage shareholders have (including retained earnings) in the business.

Step 3: First, you can review your company’s assets, which are divided into three categories on the Balance Sheet:

• Current Assets: including cash, inventory, accounts receivable, and investments.
• Fixed Assets: which refer to tangible assets, like furniture, property, and equipment.
• Other Assets: in this case, apply to deposit assets, personal expenses, and all other assets that don’t fit in anywhere else.

Step 4: Next in the Balance Sheet is Liabilities & Equities, which are divided into the following categories on the Balance Sheet:

• Current Liabilities: which include all monies owed by the company that are due within one year. These could include short-term debt, accounts payable, and other financial obligations that are due within one year of the date the debt was issued.
• Other Liabilities: like convertible loans and other loans.
• Equity: which is the amount of asset funds that were contributed by the owners or shareholders.

At the bottom of the balance sheet, you will see the net difference between the assets and liabilities, which is always zero on a correctly prepared balance sheet.

Step 5: To dive deeper into your Balance Sheet, click the gear icon in the upper right corner.

Here you can choose to view account numbers in each line item.

You are also able to view zero account balances. The default setting for your Balance Sheet hides any accounts with no balances, so for example if your Allowances for Uncollectible Accounts is at $0, by default you won’t see this account at all in your Balance Sheet unless you select Show 0 Balance Accounts.

Step 6: Once you’ve finished the review of your Balance Sheet, you can export your report. Go to the upper right corner near the gear icon and click on Export.

Note: The Detailed option for CSV and PDF expands each category to include transactional data. The Management Report downloads as a full Excel report including separate tabs for the Accounting Policy, Financial Highlights, Balance Sheet, P&L, Cash Flow Statement, and Journal Entries.

With your Balance Sheet, you now have oversight into the financial health of your business. Looking for more reports to gain a complete financial understanding of your business? The Profit & Loss and Cash Flow Statement reports are two remaining pieces of the pie that is your business.