Biz Basics – The Balance Sheet. What is it and why do we need it?

How do I read a Balance Sheet?

The Balance Sheet.

When you’re running a business, there are a number of financial documents that you will be given by your accountant or maybe even have prepared by your accounting software. One of these documents is the Balance Sheet.

Picture this:

Same as every other month, your accountant sends you an email. Its got attachments upon attachments at the bottom, and you know EXACTLY what they are.

Your financial statements for the prior month, ugh.

The trouble is that you have no idea what all those numbers on the page even mean. All you know how to read on the page is the (hopefully) big number at the bottom. When you see a positive balance, there is a sigh of relief. When there is a negative balance, the alarm bells in your mind start going off. You start to panic. Oh CRAP!

All the numbers in between are there to tell you something. But, unless you have been taught at some point to read your financials, you’ll never know the story they are trying to tell you.

related: 8 Things to Know About Running Your Own Business

One of the documents that your accountant will be preparing for you is a balance sheet. The balance sheet is a document that shows you the financial health of your company is at a certain point in time. It’s a snapshot of your business. It is usually prepared on a monthly, quarterly or annual basis. You can use this document to compare month over month, quarter over quarter or year over year.

If you are anything like me, you really want to know what all the numbers mean, but don’t know where to start in understanding them.

So, what I did is compile exactly that information for you in a nice little package. Its quick and easy to reference, and has key definitions and calculations for you to use at any time. I know when I look for information on the interwebs, there’s a lot of technical jargon involved that can make it hard to really grasp. I have taken all of that info and made it super easy to read, remember and refer back to. Print it out and take a look at it the next time your financials come in.

Download your copy of our Boss Women Business Basics – The Balance Sheet pdf now!

Here’s to taking the first step in building a better business in 2018!

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