Financials on Balance

A few months back I talked about the Profit & Loss Statement in a blog about allowable write-offs.  This time around I’m looking to explore the second major statement for many companies – the Balance Sheet.

Proprietorships and partnerships are only required by law to produce a Profit & Loss Statement.  As mentioned, the bottom line is added to and impacts the personal income of the owner or owners.  This in turn affects the taxes that they will ultimately pay.  Corporations, however, must also submit a Balance Sheet to Revenue Canada at the end of the fiscal year.  This is mandatory.  Proprietorships and partnerships can generate and make use of the Balance Sheet but, in their case, it is not a mandatory requirement – from a tax standpoint.

So what is the Balance Sheet all about anyway?  If the Profit & Loss Statement is about revenues and expenses leading to a bottom line across a period of time, the Balance Sheet is about the net worth of a business at a given moment in time.  A snapshot of the financial health of the business if you would.  This need not only occur at year end but can be generated whenever and as often as necessary whether it be monthly, quarterly or any other time frame.

The Balance Sheet is divided into 3 major sections – assets, liabilities and shareholder or owner equity.  In its simplest terms the assets are what the business owns expressed in dollar values, the liabilities are what the business owes to creditors – again expressed in dollar values and equity is what remains which is the net worth of the business to shareholders and/or owners.  To sum it up – assets minus liabilities equals equity.

In a healthy situation the net value of the assets are greater than the value of the liabilities which leaves the equity balance as a positive value.  In other words, if the company were to fold immediately, the shareholders or owners could expect a positive return upon collapse.  Is the opposite possible?  Very much so.  Does this mean the company is in trouble or in danger of collapse?  Not necessarily provided that the plan and mechanisms are in place to turn it all around.

So what are assets anyway?  Assets can be current such as cash and accounts receivable or non-current such as buildings, land, equipment, vehicles, etc.  All of these are of value to the company.  Current in this context just means cash or readily converted into cash.

Liabilities on the other hand include such things as accounts payable, loans, lines of credit, credit card balances, payroll owing, taxes owing, etc.

The equity of the business is usually divided into capital stock and retained earnings.

So why is it important to pay attention to the Balance Sheet along with the Profit & Loss Statement and the myriad other statements available from a properly maintained set of books?  Besides the requirements imposed by Revenue Canada, smart owners and managers will use the numbers provided by the statements to manage their businesses.  They will be able to monitor trends, target growth, manage cash flow and short circuit any problems before they arise or do very much damage.

Investors, lenders, shareholders, the accountant and other parties may also need to see proper statements like the Balance Sheet in order to determine their relationship and future with the business.

By doing comparisons across time of a number of Balance Sheets, the changes in the position of the company can be viewed and assessed and reacted to.  This is also vital when it comes to planning for the future.

Coming up with an accurate and timely Balance Sheet involves the dedicated input of full cycle accounting by the bookkeepers – also covered in a previous blog.  For our clients, this is what we do.  As usual, I would be happy to review the Balance Sheet along with all the financials of our clients at any time.  You need only ask.

Enjoy your summer.

Tracy

Vaidehi

Bookkeeper

Meet Vaidehi, a dedicated and professional Bookkeeper since 2021, who proudly supports and assists her clients. Her efficiency and expertise shines through her seamless handling of her clients’ financial records including Accounts Receivable, Accounts Payable, Bank Reconciliation and client communication. Trust Vaidehi to provide the support and solutions you need. During her personal time, Vaidehi enjoys dancing, cooking and tending to her garden.

Tinna

Bookkeeping Manager

Introducing Tinna, our resourceful and dynamic Bookkeeping Manager with over 12 years of hands-on experience. An expert in all aspects of accounting and finance operations, she handles preparation and maintenance of statutory accounting books, reconciling revenue and expenditure accounts, overseeing the preparation of monthly, quarterly, bi-annual and year-end financial statements, implementing stellar accounting systems and controls, budgeting and financial projections. Tinna’s solid background in managing both financial and non-financial assets, investigating and auditing accounts, makes her an asset to the Fiscal Performance team.

Duane

Executive Director

A true believer in the power of streamlined workflows and strategic financial planning, Duane is not just about balancing the books; he is also about balancing success with sustainability, innovation with tradition, and growth with groundedness. Bringing together a blend of expertise, experience, and enthusiasm, he is focused on improving systems to continue on providing a high level of customer service to all of Fiscal’s partners, customers and vendors. He invites you to join the Fiscal Performance network and learn how to solve your accounting and bookkeeping challenges today.

Olu

Client Service Manager

If you’re seeking a bookkeeper with a passion for precision, a friendly demeanor, and a love for the beautiful game of soccer, then look no further than Olusegun. With over 10 years of experience with auditing and financial analysis, Olusegun brings a unique blend of expertise and enthusiasm to the table. Known for his approachable demeanor and willingness to go the extra mile, he’s not just your typical accountant – he’s a trusted ally in your company’s full cycle financial management. So, if you’re in need of a bookkeeper (with auditing know-how) who gets the job done, valuing integrity and reliability as part of every job, Olusegun is your go-to guy!

Sam

Task Manager & Quality Control

Sam is a seasoned Bookkeeping Manager with over 14 years of experience. Proficient in book cleaning, reviews, HST report preparation, and finalizing accounts using QuickBooks, he holds a Bachelor’s degree in Law, and Master’s degree in Commerce. Sam is known for his dedication to meeting deadlines, his collaborative work ethic, and equal prioritization of family and work. A nature and pet lover, he finds solace in music.

Alex

Reviewer

Meet Alex, a highly esteemed member of our team, whose accounting expertise spans back to 2015. Holding a semi-qualified Chartered Accountant designation and a post-graduate in Accounting (achieved in 2018) Alex remains steadfast in catering to the needs of clients. Over the course of this distinguished career, Alex has cultivated invaluable proficiency with an array of esteemed accounting software. Renowned for unwavering punctuality, Alex consistently maintains a proactive approach, ensuring meticulous oversight of all deliverables.

Eric

Bookkeeper

Meet Eric, a distinguished professional with a Master of Commerce and a semi-qualified Chartered Accountant. He boasts three years of specialized experience in Canadian and US accounting, using software such as QuickBooks Online, QuickBooks Desktop, and Dext. Eric’s proficiency shines through his seamless handling of onboarding, migration, clean-up, and catch-up projects. Renowned for his tech-savvy approach, Eric leverages his expertise in advanced Excel macro building to empower clients — enhancing their productivity and efficiency. Trust Eric to deliver unparalleled financial solutions tailored to your specific needs, ensuring excellence every step of the way.

Jess

Bookkeeper

Jess is a dedicated Bookkeeper, with a Bachelor of Accounting, who is proud to assist her clients with bookkeeping support, since 2020. Jess is well-versed in a suite of software programs with a focus on QuickBooks Online. Her expertise extends beyond conventional bookkeeping, encompassing Accounts Receivable, Accounts Payable Management, Payroll processing, and adeptly managing the books as per client specifications and needs. She stands out for her swift file processing capabilities and streamlined financial processes at Fiscal Performance.

David

Task Manager

Meet David, Fiscal Performance’s Task Manager. A distinguished accounting & finance professional since 2014, David is adept in leadership roles. Known for his advanced skills in process implementation and continuous improvement, David works to ensure optimal outcomes for clients. With extensive experience spanning global markets including Canada, USA, UK, and Australia, he specializes in providing comprehensive CFO & bookkeeping services. Proficiency in a variety of accounting software enables him to tailor solutions to meet his clients’ needs effectively. David is detailed oriented and his ability to deal with conflicting priorities in high-pressure situations makes him an VIP at Fiscal Performance.

Chris

Reviewer

Introducing Chris, a Reviewer at Fiscal Performance and a seasoned professional in the accounting & finance industry. He boasts a career, starting in 2017, that includes executive roles to team leader positions. A post graduate in accounting, he is proficient in software such as QuickBooks Online and QuickBooks Desktop. Chris has honed his skills over the years, optimizing his bookkeeping processes by prioritizing accuracy and efficiency. Known for his dedication and meticulous approach, Chris consistently seeks out innovative solutions to streamline operations and deliver top-tier results. His commitment to excellence and his proactive attitude makes him an invaluable asset at Fiscal Performance.

Tracy Khamis

CPB, DFA – Bookkeeping Services Specialist™

Managing Director

Always wanting to learn and gain knowledge, Tracy has worked for multiple companies from various industries. Having the opportunity to work in varied industries from small companies to large organizations such as banks, accounting firms, schools, restaurants, construction, manufacturing and the arts has been extremely exciting. Each industry has different rules that apply, along with different government requirements. This experience has provided Tracy with extensive growth and understanding of bookkeeping, multiple software platforms, and in-depth financial report preparation. To know Tracy is to appreciate what she can do to put your books in order and keep them in a timely, relevant and professional manner.

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