Finance Management
admin • 17 Sep 2023
Balance sheet is a document that breaks down all of a company's financial assets and liabilities during a given period. This includes income, profit, debts, investments and obligations, for example.
Its objective is to illustrate, with clarity and security, what the financial reality of the institution is at that moment. Therefore, it is essential that it is done correctly, guaranteeing reliable results, which can serve as a basis for effective decision-making.
To help you with this task, we created this article where we explain the main concepts related to the topic and teach you how to put together a balance sheet in a simple way. So, keep reading:
The balance sheet is one of the most important reports in effective financial management . The document serves as a guide that indicates all of the company's assets and debts, which makes it possible to broaden the vision of the reality of the business.
The balance sheet can be especially advantageous for leaders and investors, as it allows them to clearly understand whether a business is profitable or not, being considered one of the most accurate financial indicators. From this, it is possible to analyze the company's financial health and propose the necessary changes.
Additionally, it can be a credit guarantor. After all, the solution is a transparent portrait of the organization's finances, which can be used as proof that it has the funds to hire and cover the expense.
Balance sheets must be prepared at the end of each fiscal year, that is, every 12 months. This way, it is possible to survey the institution's finances for the period and have them as a basis at the beginning of the next year.
Furthermore, most of the time, whether or not to take stock of your business is not optional. After all, more than a tool for financial management, this type of report is mandatory for all companies, except those covered by Simples Nacional .
To make an efficient financial statement, you need to know the indicators that are part of this report. The four main ones are:
To prepare a balance sheet, it is essential, above all, to have knowledge in the financial area, which is why it is recommended to seek professional help for this task, but there are simple guidelines that can facilitate this process. Checkout how to do it in five steps:
The balance sheet is made based on a period of time, once a year. Therefore, it is necessary to define which months will be analyzed, which may vary depending on the needs of the business.
Then, make a list of all the company's financial assets and liabilities, including cash flow, tax obligations, accounts receivable , among others. To facilitate organization, they can be divided by nature or dates, for example, as it can be a very extensive list.
To reconcile accounting balances, compare the information collected with the institution's accounting records . This action ensures that the information is correct. If any discrepancy is found, it must be corrected by making the necessary adjustments.
To obtain the total value of the company's net equity, it is very simple, just subtract total liabilities from total assets. For example, if the total sum of funds reaches R$120 thousand and liabilities reach R$70 thousand, this means that the organization's own resources are R$50 thousand.
Once all of the organization's financial data is available, it is time to assemble the balance sheet. To do this, include the company data in the header, assets on the left side and liabilities on the right margin. Values should be listed in descending format, from highest to lowest.
Period analyzed
Current assets
Non-current assets
Total resources : R$400,000
Current liabilities
Non-current liabilities
Total obligations : R$145,000
Net worth: R$255,000 (assets – liabilities)
With this document in hand, it is possible to analyze the relationship between assets and liabilities and understand whether there was a profit or loss in the period. In general, it is expected that there will be a balance between values, indicating a favorable financial health of the institution.
Creating a balance sheet is one of the most efficient ways to have control over your organization's finances. Through the information collected, the manager is able to understand the company's financial situation, which allows him to make correct and well-founded decisions.
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