The balance sheet, or statement of financial position, forms one of the financial statements (the others are the income statement, the statement of cash flows, and the statement of shareholders’ equity with accompanying notes) that shows the position of the company. company at a certain time. its assets and liabilities, as well as capital. Give the figures for assets including current and fixed assets, liabilities including current and fixed, and equity or the amount contributed by shareholders plus retained earnings (or losses, as the case may be).

Unlike the income statement, another of the financial statements, which shows fiscal performance over a period of time, the balance sheet, is a picture of a particular period of time. While both can be prepared for any duration (or for any time), they are typically done at the end of the financial year. It is mandatory to do so as provided by legal requirements, including submission to tax authorities. Accounting standards also require that a balance sheet be prepared that accurately reflects the company’s financial condition.

The balance is the last of the statements to be made; the steps in accounting after this are their interpretation by management. Although this by itself is not enough, the information, ranging from the addition (or reduction) of working capital, in the event that current assets are less than current liabilities (or vice versa), knowing the net worth of the company, determine future sustainability, calculate dividends to be distributed to shareholders. Employees can also be adjusted based on the generated decision.

It has other users besides the tax authorities and the administration; public, as well as investors and creditors who have no other document to trust, can assess the health of the business, its liquidity by reading it. They can see if the company can meet its obligations for what it owns. The question of whether or not to invest in the business can be resolved with a glance.

Of course, there are notes that accompany the financial statements. In addition, these should also be consulted in case there is relevant financial information for current and potential investors, as well as for lenders and other creditors to help decide on the resources of the entity. Accounting applications help to make the balance. The process follows from the earlier stages of journal entries being made, a general ledger being prepared, and the trial balance being counted. At all stages, the accuracy of the input is ensured so that there is no inconvenience when preparing it. This also helps reduce the number of employees needed to set it up, thus freeing up labor to take care of other important issues.

Management can view the company’s financial position without having to wait until the end of the fiscal year thanks to a feature in the apps that can quickly display the status of the company at a given time with some option to give the balance in real time . Comparison of records from prior years (or prior periods) is also facilitated when using applications.