Contents - Index


Balance sheet


The balance sheet covers the business/company.  It cannot be split by department.

The balance sheet report can be run at any time.  If the trial balance does not balance there is no point in running the balance sheet report.  First correct the problems that gave rise to the imbalance in the trial balance.

The balance sheet requires a certain amount of work to display everything properly.  

1.  In the asset register (if you are using it) make sure the asset sales and capital expense accounts are linked.  You may need to set them up.  Asset sales is an income account that is not subject to tax and G.S.T. does not apply to it.  Capital expense is an expense account that G.S.T. applies to, but is not subject to tax (if you are going to claim depreciation).

2.  In balance sheet control link the loan and prepaid tax accounts.  The loan account is an income account that is not subject to tax or G.S.T. The prepaid tax account is an expense account that is not subject to tax or G.S.T.  Prepaid tax includes prepaid G.S.T., provisional tax, and prepaid income tax.  This requires that you have only one loan account.  There may be more than one loan in it.  That detail is picked up by the transaction journal report.  Loan repayments can be allocated to specific departments.  This means the cost of running those departments can be analysed.

If you set up the above accounts (they come preloaded) but don't link them to the asset register or balance sheet control their transaction totals will display in the wrong place on the balance sheet.  Because they do show (assuming transactions were entered for them) your accountant can make the required changes to your final balance sheet.

The balance sheet's primary purpose is to show what equity your business has at the end of the financial year.  The section to look at is Liabilities and Equity - owner's equity.  If you regularly make a loss, and have few assets, your equity will be low, or negative.  In that case you may find it difficult to raise loans when you need them.