Assets also includes money the business holds in its bank and cash accounts, money tied up in stock that it owns, and money owed to the business, perhaps by customers who haven't yet paid their invoices. These assets are called current assets. Money owed by customers who haven't yet paid is also known as accounts receivable, or trade debtors.
Liabilities are divided into long-term and short-term liabilities. Short-term liabilities are money that the business will have to pay out soon, such as money owed to staff, or to HMRC as VAT or PAYE. Another short-term liability is money that the business owes to its suppliers for unpaid bills. This is also known as accounts payable, or trade creditors.
Long-term liabilities will usually fall due for payment in more than a year's time. This might include part of some bank loans, or hire purchase deals.
The Balance Sheet also shows the amount of capital that the owners have put into the business.
If your business is a sole trade or partnership, this will be represented by actual money invested.
For limited companies, capital is represented by purchased shares. Companies also show on the balance sheet reserves of profit that has been made in previous years.
Why 'Balance' Sheet?
Because of the way double entry bookkeeping works, the Balance Sheet should always balance.
FreeAgent will handle all the double entry bookkeeping of the transactions you enter during the year, such as posting of bills, invoices, bank receipts and payments, so that your Balance Sheet should always balance.
Where can I find my business's Balance Sheet in FreeAgent?
To look at your business's Balance Sheet, select the Accounting tab, choose ‘Reports’, then select ‘Balance Sheet’ from the High Level menu.
A Balance Sheet is always shown as at a given date, because it shows the balances of what the business owns and owes at that date. You can filter the Balance Sheet by date using the drop-down menu at the top of the page.
To select a specific date for the Balance Sheet, choose ‘Custom date’ from the drop-down menu, select the date, and choose ‘Show this date’.
The Balance Sheet will show the correct figures for that date, and if you choose to view any individual items on the report, the date filter will continue to apply.
You can check the figures for the year so far by selecting ‘Now’ from the drop-down menu. Alternatively, you can see the balances as at a previous year end by selecting 'As at [choose the date]' from the drop-down menu.
You can also select ‘Opening Balance’ from the drop-down menu. The Opening Balance view is useful when you are making sure you have put in all your opening balances correctly.
If you want to see any of the figures for a particular account in detail (e.g. 001 Sales), simply select the account on the Balance Sheet. This will display all the individual transactions that are included in the total figure for that account.
You can export the Balance Sheet report as either a CSV or PDF file. Just choose the appropriate format from the drop-down menu.
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