Accounting is available on Pro and Prime plans.

A balance sheet is a financial report that a company uses to report its assets, liabilities, and shareholder equity. It gives a general overview of what the company owns and what the company owes plus capital invested.

The following equation is used to calculate the balance sheet: Assets = Equity + Liabilities.

However, Fiskl automatically calculates this for you so that all you need to do is enter the time period you would like to report against and how you would like to present your information.

Below are the frequently found line items within the Balance Sheet: Current Assets, Long-Term Assets, Current Liabilities and Long-Term Liabilities, Equity:

Current Assets

This includes assets with short-term maturities that are less than one year. They are grouped as follows:

  • Cash and Cash equivalents: Is the most liquid asset and is listed on the first line. This line item also contains money in the bank, cheques received (undeposited funds), petty cash.
  • Accounts Receivable: This account includes all sales revenue that is still on credit. It excludes any allowances for bad debt expense, for example, when you know your customer is unlikely to pay you. When you receive money from your clients the Accounts Receivable account balance goes down and the cash account balance goes up.
  • Inventory: Inventory includes raw materials, work in progress, and finished products. This account is used when the company reports sales of goods. The cost per unit of goods sold is generally reported in the Profit & Loss report. The balance you see in the Inventory account represents the total cost of the inventory that you have available for the sales of production.

Long-Term Assets

This includes assets with long-term maturities that are more than one year. They are grouped as follows:

  • Property, Plant and Equipment: Property, Plant, and Equipment (also called PP&E) refers to fixed assets. The line item is taken net of the accumulated depreciation. Some companies will categorize their PP&E based on the types of assets, such as Vehicles, Furniture and Fixtures, Buildings, Leasehold Improvements or various types of equipment. Except for Land, all PP&E are depreciable. Intangibles are also part of the PP&E group, they may or may not be identifiable. Patents, Usage Rights, and Licenses are examples of identifiable intangible assets. Brand and goodwill are unidentifiable intangible assets.

Current Liabilities

These are obligations that a company has to pay within one year of the date on the Balance Sheet, it may require the use of current assets or creating another liability. Current Liabilities is also called Short-Term Liabilities. They are grouped as follows:

  • Accounts Payable: Accounts Payable (AP) is a short-term debt that a business owes to its suppliers/vendors for providing goods or services on credit, this is shown as a liability on the Balance Sheet.
  • Credit Cards: Credit Card Accounts are listed in this group and its balance is the amount that you owe to the bank. 
  • Sales Taxes Payable: This is any indirect type of tax such as VAT (UK, Germany, Italy etc), GST/HST (Canada), GST (Australia, India), Sales Tax (USA) plus many more. This type of tax applies on top of the sales amount and is paid purely by your client where you are the only collector of the tax and you transfer it to the state.
  • Other Taxes Payable: Any other tax that is not indirect or payroll tax should go to this group, for example, tourist tax, corporate tax, carbon tax, property tax.
  • Payroll Payable: In this group you add all the payroll related payables, such as payroll payable, payroll taxes payable, open holidays. It applies to wages and salaries of employees rather than contractors. 
  • Loan Payable: List of loans with balance due to pay regardless of interest. Only loans (or its short term payable portion) up to 12 months from the date of the report should be added here.
  • Other Current Liabilities: Other Current Liabilities represent all other Current Liabilities accounts that are not mentioned in the groups above, like Accrued Liabilities (expense incurred but not billed), Deferred Income (subscription income related to future periods, invoices sent but goods not shipped), and others.

 Long-Term Liabilities

This account contains the total amount of long-term debt, except for the current portion of it which is already included under Current Liabilities.

  • Long-Term Loan: List of loans with balance due to pay regardless of interest. Only loans (or its long term payable portion) above 12 months from the date of the report should be added here.
  • Other Long-Term Liabilities: Any other liability which has to be paid over a period of one years time is listed in this group, for example, Shareholder Loan. 

Equity

The Equity part of the Balance Sheet represents capital invested in the business and company profit (loss) amount. 

  • Share capital: This is the total amount of capital that shareholders have put into the company. Shareholders will often contribute cash when a company is founded, it can also be other assets, for example, intangibles, equipment. 
  • Retained Earnings: This is the amount of net income that the company decides it wants to keep. A company can pay dividends out of its net income every period or leave it as not distributed. To put it simply, this account shows how much of a profit (loss) the company has for the previous financial years. It may be paid out as dividends at any time or kept to grow the business.
  • Profits for the Year: This shows the company result for the financial year selected.

Opening Balance

Opening Balance serves as a temporary account where you or Fiskl places your previous balances with clients, vendors, bank accounts, inventory accounts etc. For example you had a client you worked with before you started using Fiskl and you set the balance on his card within Fiskl, then the system automatically creates an entry with Accounts Receivable and Opening Balance accounts. Same happens to your bank account when you connect it in Fiskl. You have to move the Opening Balance account balance to Retained Earnings or Profit for the Year through Income or Expense accounts. 

From the accounting menu items, select reports, here you will find your automated balance sheet.

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