Reconciling balance sheet accounts

Balance sheet reconciliation includes checking that every entry in your balance sheet is accurate and supported by actual information. A balance sheet reconciliation provides you with a clear picture of your financial situation and shows that all of the entries are appropriately recorded. A number of companies compare their bank statements and balance sheet. To make sure your balance sheet is correct, you can also use your sub-ledgers, such as accounts payable, accounts receivable, or even fixed asset transactions.

• Compare your bank statement with your bank balances.
• Compare your accounts receivable with the invoices from your clients.
• Check accounts payable against bills from suppliers.
• Utilize your stock register to reconcile inventory.

What is a budgeted balance sheet?

A budgeted balance sheet is a form of your balance sheet that looks ahead. It predicts how your balance sheet will appear at the conclusion of a future period if you adhere to your existing budget and business objectives, rather than displaying what actually transpired.

• Make a financial plan for the future.
• Establish goals for lowering liabilities
• Prevent financial hazards before they arise

Assets (Everything Your Business Owns)

Anything that an organization has bought, held, and deemed valuable that can be used to satisfy obligations, debts, or legacies. Additionally, assets are generically categorized as:

Fixed assets are something you hold onto for a long time. These are goods that your company doesn't intend to sell quickly but uses for more than a year:

• Buildings and land
• Equipment and machines
• Automobiles
• Furniture and computers
• Trademarks and patents are examples of intangible assets, which are items you own but cannot physically touch.

Things that can be turned into cash within a year are known as current assets.

Cash, bank balances, investments, deposits, accounts receivable, and inventory are a few examples of current assets.

Liabilities (Everything Your Business Owes)

Any debt or obligation that your company has to pay back is a liability. Additionally, there are two categories of liabilities:

Non-Current Liabilities (long-term debts — due after 1 year)

• Bank term loans
• Deferred tax liabilities
• Long-term borrowings from partners or investors

Current Liabilities (short-term debts — due within 1 year)

• Accounts payable / creditors — money you owe your suppliers
• Short-term bank loans / overdraft
• GST and income tax dues
• Salaries payable to employees