How to Make a Balance Sheet Report and Read It

Every company must be familiar with balance sheets. Especially in every accounting cycle of a company. The balance report is a series of corporate financial reporting in each company’s accounting cycle. In making a balance report, there are important company data relating to company transactions.

At the end of a company’s accounting cycle , the balance sheet becomes a handle that states how the company has performed during the past period. From the balance sheet, it can be seen various data such as whether the company suffered a loss or not, which products the market liked the most and which the market did not like. So that it can be an evaluation of the company.

Table of Contents

1 What is a Balance Sheet?

2 Contents of the Balance Sheet

2.1 Assets

2.2 Obligations

2.3 Capital

3 Forms of Balance Sheet

3.1 Balance Sheet

3.2 Staffel Balance Sheet

What is a balance sheet?

A company’s balance sheet or balance sheet is a systematic report on the assets, liabilities and capital of a company in a certain period. In the balance sheet there are company resources or company assets, economic or debt liabilities, share capital and relationships between these items . In other words, the company’s balance sheet is a description of the company’s financial condition. Reading the balance sheet must be compared with the balance sheet in the previous period for consideration. Can also be compared with other companies in the same industry in order to have mutual consideration.

The balance sheet aims to show the financial position of a company in a certain period, usually at the time when the books are closed and the remainder is determined at the end of a fiscal year or calendar year. In making a balance report, there should be no mistakes. Every transaction data and recorded assets must be recorded carefully so that there are no errors that result in company losses.

Contents of the Balance Sheet

·         Assets

Assets or assets are assets owned by the company with future useful values, such as trucks, cargo cars, cargo cars, office buildings, and others that are useful for the company. These assets consist of current assets and tangiable fixed assets .

·         Obligations

Obligations or liabilities consist of current liabilities ( c urrent liabilities ) and long-term debt (long term liabilities) owned by a company.

·         Capital

Capital or equity is the price of company assets owned by the owner of the company. Capital can be increased or decreased at any time. This depends on the company owner or investor.

The balance above is an important balance sheet for the company. Assets in the company must always be controlled and safeguarded so that there is no loss that must be borne by the company. Obligations should also be examined carefully. If the debt owned by the company is higher than the capital or profit, the company may go bankrupt. Likewise capital. In a company, capital must always be regulated so that it can still finance the company’s needs.

Forms of Balance

A balance sheet takes several different forms, but the content and details in it are almost identical to one another. You only need to adjust the form of the balance sheet with the type of company transactions and how many transactions are happening in your business. this will make it easier for you to choose which form of balance sheet suits your type of company so that the process of making balance reports is also easier.

·         Skontro Balance Sheet

A skontro form of balance sheet is a form of balance sheet financial statement that separates assets in the right position and liabilities in the left position.

If you want to make a balance in the outline form, then you need to separate the right side and the left side. On the right side, you can top up with a capital and liability account. Meanwhile, on the left side, you can fill in the accounts that are categorized as company assets.

·         Staffel Balance Sheet

Staffel balance sheet is a form of balance that is arranged lengthwise down and the balance is placed on the side in the debit and credit column.

Also read:  The Importance of Balance Sheet Management in a Company

Keep in mind that company assets consist of current assets and long-term assets. Everything is put into the column on the left side. Current assets are company assets that can be converted into cash in one year or less. For example, such as cash, marketable securities, accounts receivable, supplies, etc. Meanwhile, long-term assets are company assets that cannot be converted into money within one year or less. For example, are long-term investments, fixed assets, and intangible assets.

On the balance sheet that you created, separate the current and non-current assets for asset accounts. To make it easier for you to record what assets or company assets you currently have. Besides being able to know more clearly what the company’s assets are, separating current and non-current assets can facilitate the process of making a company’s balance sheet. Start with current assets that are the fastest to liquidate.

Then enter the items for liabilities or liabilities and capital or equity. Remember, you have to record every detail and you shouldn’t overlook anything. Long-term debt and the amount of capital owned by the company must be recorded in nominal detail so that there are no errors on the balance sheet.

Don’t forget to divide your liabilities or liabilities into 2 parts, namely long-term liabilities and short-term liabilities. Long-term liabilities are liabilities that mature at one point after one year. Meanwhile, short-term liabilities are liabilities that mature in one year and are listed in order of maturity date. By writing in detail about the company’s liabilities, you can find out how much the company will pay for the next year and beyond.

The company’s balance sheet uses the following accounting equation:

Asset (Asset) = Liability (Liability) + Capital (Equity)

After calculating using this equation, look at your balance sheet. is it balanced or not. If both sides of balance or balance then there is no problem in the balance sheet of your company. but if it is not balanced, then an error occurs in the process of the company’s balance sheet. You have to examine the transactions that occur again and do a recalculation so that the balance becomes balanced. These errors can occur due to errors when entering accounts to the general ledger or from the ledger to the balance sheet.

To make balance reports that are easy, fast and accurate. You can use the  Journal software  . Complete application for making financial statements, in addition to balance sheets, there are also cash flow and profit and loss and others. The journal also has easy access anywhere and anytime which has been certified by ISO / IEC 27001 so that the data is guaranteed to be safe.

 

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