What is your business worth?

The Balance Sheet gives you a snapshot of your business's financial position at a specific point in time. While the Profit & Loss shows performance over a period, the Balance Sheet freezes the frame and shows exactly what your business owns, what it owes, and what's left for the owners.

Think of it as a financial photograph. It captures your business on a single date, showing the total value of everything you have, minus everything you owe. The result is your equity, which represents the true value of your business.

Why the Balance Sheet Matters

Business owners use this report to:

• Assess business value by seeing total assets minus total liabilities (your equity)
• Evaluate financial stability by comparing what you own against what you owe
• Monitor growth by comparing balance sheets from different periods to see how your business has changed
• Support loan applications as lenders use this report to assess your ability to repay debt
• Make investment decisions by understanding how much capital is tied up in assets versus available as cash

Accessing the Report

To view your Balance Sheet, navigate to Finance → Reports and select Balance Sheet.

At the top of the report, you have several options for selecting your date:

• Current Year End shows your balance sheet as of the end of the current financial year
• Custom lets you select any specific date you need

You can also compare your current balance sheet against a previous period:

• No Comparison shows only the selected date
• Vs Previous Year adds a column showing the same date from the previous year, plus the change in value and percentage
• Vs Custom Date lets you compare against any date you choose

Use the Download button in the top right corner to export the report for your records or to share with your accountant.

The Balance Sheet Equation

Every balance sheet follows a fundamental equation:

Assets = Liabilities + Equity

This equation must always balance. Your assets (what you own) are funded by either liabilities (what you owe to others) or equity (what belongs to the owners). If the two sides don't match, there's an error in your records.

At the bottom of the report, Officaid shows a Balanced line. When this displays 0.00, your balance sheet is in balance. Any other number indicates a discrepancy that needs investigation.

Understanding the Report Structure

The Balance Sheet in Officaid is organised into three main sections: Assets, Liabilities, and Equity.

Assets

Assets are everything your business owns or is owed. They're divided into two categories based on how quickly they can be converted to cash:

Current Assets can be converted to cash within 12 months:

• Cash and Cash Equivalents is the money in your bank accounts and on hand
• Accounts Receivable is the total amount customers owe you from unpaid invoices

Fixed Assets are long-term assets your business owns and uses over time:

• Fixed Assets includes equipment, vehicles, furniture, and other items you've recorded in your asset register. This value accounts for depreciation, so it reflects the current book value rather than the original purchase price.

The Total Assets line adds up all current and fixed assets to show everything your business owns.

Liabilities

Liabilities are everything your business owes to others. Like assets, they're divided by timeframe:

Current Liabilities are debts due within 12 months:

• Accounts Payable is the total amount you owe to vendors and suppliers from unpaid bills

Long-term Liabilities are debts due beyond 12 months:

• Loans Outstanding is the remaining balance on any business loans you've recorded

The Total Liabilities line adds up all current and long-term liabilities to show everything your business owes.

Equity

Equity represents the owners' stake in the business. It's what would be left if you sold all your assets and paid off all your debts.

• Retained Earnings is the accumulated profit (or loss) from all previous periods that has been kept in the business rather than distributed to owners

The Total Equity line shows the net value of the business belonging to its owners.

Finally, Total Liabilities & Equity adds liabilities and equity together. This number must equal Total Assets for the balance sheet to balance.

Using the Comparison Feature

When you enable comparison (Vs Previous Year or Vs Custom Date), the report adds extra columns:

• The first column shows your selected date
• The second column shows the comparison date
• The Change column shows the difference in both absolute value and percentage

Green numbers with an upward arrow indicate an increase. This is generally positive for assets and equity, but an increase in liabilities means you owe more than before.

Use comparison to answer questions like:

• Has my cash position improved or worsened?
• Are my accounts receivable growing faster than my sales (which could indicate collection problems)?
• Am I paying down debt or taking on more?
• Is my overall equity increasing (meaning the business is growing in value)?

How to Use This Report

Quarterly review: Check your balance sheet at least once per quarter to understand your financial position. Compare against the same quarter last year to see how you've progressed.

Before major decisions: Review your balance sheet before taking on new debt, making large purchases, or distributing profits. It shows whether you have the financial capacity for these decisions.

Cash vs receivables: If your Accounts Receivable is high relative to Cash, you may have collection issues. Consider following up on overdue invoices.

Debt management: Compare Total Liabilities against Total Assets. If liabilities are growing faster than assets, your business may be taking on too much debt.

Frequently Asked Questions

What's Next?

Now that you understand your Balance Sheet, explore these related reports:

• Cash Flow Statement to see how cash moves through your business
• Accounts Receivable Aging to see details of what customers owe you
• Accounts Payable Aging to see details of what you owe suppliers