Balance Sheet

Your financial position at a specific point in time. Shows what your business owns, owes, and its net worth.

Overview

The Balance Sheet provides a snapshot of your business finances at a single date. It follows the fundamental equation:

Assets = Liabilities + Equity

Key concepts

Element	What It Represents
Assets	What your business owns (cash, equipment, inventory, receivables)
Liabilities	What your business owes (loans, payables, taxes owed)
Equity	Net worth (owner investment + retained profits)

Report sections

Assets

Resources your business owns:

Current Assets (convertible to cash within 12 months)

Bank accounts (all connected accounts)
Accounts Receivable (money customers owe)
Inventory (stock on hand)
Prepayments (paid in advance)

Fixed Assets (long-term tangible assets)

Equipment and machinery
Vehicles
Buildings
Less: Accumulated Depreciation

Intangible Assets

Patents and trademarks
Goodwill
Software licenses

Other Assets

Investments
Long-term receivables

Liabilities

Amounts your business owes:

Current Liabilities (due within 12 months)

Accounts Payable (money owed to suppliers)
Credit cards
GST/VAT/Sales Tax payable
Short-term loans
Employee obligations

Non-Current Liabilities (due after 12 months)

Long-term loans
Mortgages
Deferred tax liabilities

Equity

Owner’s stake in the business:

Contributed Capital

Owner contributions
Share capital

Retained Earnings

Prior year profits carried forward
Current year profit (from P&L)

Generating the report

Step 1: Select as-at date

Unlike period reports, Balance Sheet shows a single point in time:

Choose the date you want to see (e.g., “June 30, 2025”)
Defaults to today
Common dates: Month-end, Quarter-end, Financial year-end

Step 2: Choose reporting basis

Balance Sheet is always on accrual basis regardless of your business setting.

Step 3: Click Generate Report

The report displays with summary stat cards and detailed account balances.

Understanding the layout

Stat cards (top)

Three summary cards:

Total Assets — Everything the business owns
Total Liabilities — Everything the business owes
Net Assets (Equity) — Net worth

Report table


ASSETS
  Current Assets
    1000  Bank Accounts            $12,500
    1100  Accounts Receivable       $8,200
    1200  Inventory                 $3,500
          Total Current Assets      $24,200

  Fixed Assets
    1500  Equipment                 $15,000
    1510  Less: Accum. Depreciation  -$3,000
          Net Fixed Assets          $12,000

          Total Assets              $36,200

LIABILITIES
  Current Liabilities
    2000  Accounts Payable          $4,500
    2100  GST Payable               $1,200
    2200  Credit Cards              $800
          Total Current Liabilities  $6,500

  Non-Current Liabilities
    2500  Business Loan             $10,000
          Total Non-Current Liab.   $10,000

          Total Liabilities         $16,500

EQUITY
  Contributed Capital
    3000  Owner Capital             $5,000
          Total Contributed Capital   $5,000

  Retained Earnings
    3100  Prior Year Earnings       $8,700
    3110  Current Year Earnings     $6,000
          Total Retained Earnings   $14,700

          Total Equity              $19,700

═══════════════════════════════════════════
TOTAL LIABILITIES + EQUITY        $36,200

Balance validation

The report automatically validates:

Total Assets must equal Total Liabilities + Equity
If unbalanced, an alert displays (contact support if this occurs)

How retained earnings works

The Balance Sheet automatically calculates retained earnings from your P&L:

Prior Year Earnings

All profit/loss from before current financial year
Automatically carried forward (Xero-style, no manual closing journal needed)

Current Year Earnings

Profit from the start of current FY to the as-at date
Matches your P&L Net Profit for the same period

Total Retained Earnings = Prior Year + Current Year

Understanding account balances

Positive vs negative amounts

Account Type	Positive Amount Means	Negative Amount Means
Assets	You own this	(Unusual — credit balance on asset)
Liabilities	You owe this	(Unusual — debit balance on liability)
Equity	Owner has stake	(Unusual — negative equity/bankruptcy risk)

Exporting

CSV export

Generate the report
Click Export → CSV
File downloads as Balance_Sheet_YYYY-MM-DD.csv

Best practices

Monthly review

Check that Total Assets = Liabilities + Equity (always balanced)
Review cash position (Bank Accounts under Current Assets)
Monitor Accounts Receivable (should be collecting)
Watch debt levels (Total Liabilities trend)

Quarter-end review

Compare to previous quarter
Review working capital (Current Assets - Current Liabilities)
Check liquidity ratio (can you pay short-term debts?)

Financial year-end

Generate as-at June 30 (AU), Dec 31 (US/CA), or March 31 (UK)
Export for your accountant
Review asset valuations
Verify liability completeness

Key ratios you can calculate

Working Capital


Working Capital = Current Assets - Current Current Liabilities

Positive = Can pay short-term debts
Negative = Potential cash flow problems

Current Ratio


Current Ratio = Current Assets / Current Liabilities

Above 1.0 = Good short-term financial health
Below 1.0 = May struggle to pay bills

Debt to Equity


Debt to Equity = Total Liabilities / Total Equity

Lower = Less reliance on debt
Higher = More financial leverage (risky)

AU-specific notes

EOFY preparation

Before June 30:

Generate Balance Sheet as-at June 30
Reconcile all bank accounts
Verify asset register (depreciation up to date)
Check loan balances match statements

Tax considerations

Asset values may affect capital gains tax
Depreciation reduces taxable income
Owner drawings affect equity (not expenses)

BAS and balance sheet

GST Payable should match your next BAS
Review GST Clearing account balance
Check for any GST adjustments needed

Troubleshooting

Balance sheet won’t balance

This should never happen — contact support immediately
Possible causes: data integrity issue, incomplete transaction posting

Negative retained earnings

Business has cumulative losses exceeding profits
Review P&L to identify loss-making periods
May indicate business viability issues

Bank accounts don’t match actual balances

Ensure bank reconciliation is complete
Check for unreconciled transactions
Verify statement imports are current

Accounts Receivable seems wrong

Check for old unpaid invoices
Verify no invoices are in “Draft” status
Review credit notes and adjustments

Equity section confusing

Contributed Capital = Money you put into the business
Retained Earnings = Profits kept in the business
Drawings reduce equity (separate from expenses)

Profit & Loss — Performance over a period
Trial Balance — All account balances
Aged Receivables — Detail on money owed
Aged Payables — Detail on money you owe

Last updated: February 24, 2026