G/L Balance Sheet

The Balance Sheet is the primary document to be used by the  accountant when reviewing the financial stability of the business.  It displays the totals for each account, and the percentage of the  section total that the amount represents.

For example, perhaps the  total Cash Receipts was $5,000.  If total Assets are $50,000, the  Cash Receipts amounted to 10%.

When reviewing the Balance Sheet, it is particularly important to  look at the cash totals.  Often called liquid assets, because they  can be accessed immediately, they include the Cash Receipts, Credit  Cards, and Bank Account totals.  Cash Flow is a vital issue to any  small business.

When the economy is soft, leveraged (credit) buying  can become a real opportunity for failure.  Whenever anything is  purchased with an obligation, it involves increased cost.  The  obligation must be satisfied if the business continues.

Cash assets  enable the business manager to make less costly purchases, and to  receive goods in a more timely manner.  They are also less stressful  (no bill collectors will call).

Remember, also, that the Balance Sheet reflects status at any given  point in time.  It is important to not assume that funds available  today are available tomorrow.  In fact, the sheet will tend to jump  at any given point in time because of periodic expenses that arise.

The Balance Sheet is printed for a given period of time.  The  standard is to look at the balance when the report is run.  However, the system will provide a breakout of totals for any given month, or  quarter, if requested.