What is a balance sheet?

A balance sheet is a financial overview of all the assets of your company. This is a snapshot of the assets of your company. Whenever a financial adjustment is being made, then the balance sheet will also change. The balance sheet is an important part of your annual financial overview, as is your profit and loss statement (P&L). Together they complete your annual report for the end of the year.

In this wikie article we will briefly explain what the terms of the balance sheet mean as you can find these in Gekko.

Assets

The assets on your balance sheet are an overview of all the assets in your company. This includes the money available to your business, plus the investments, materials and stock, and machinery.

Balance bank account

This is the snapshot of the balance of your bank account. When your bank account is connected to Gekko, a snapshot of the balance of your bank account is created when you calculate your balance sheet.

Cash & cash equivalents

Also known as liquid assets. This includes all other monetary assets of your company. For example, cash that has not yet been entered in Gekko.

Accounts receivable

Accounts receivable includes all the invoices that have not yet been paid by your customers. In essence, these are the debts of your customers that are owed to you.

Investments

Investments are material assets of your company that you can write off over several years. Investments are expenses of more than €450,- (excl. VAT). For example, computers or expensive machinery that you have purchased for your company.

Liabilities

Liabilities includes all of the debt of your company. This includes all the money that is invested in your company, which you have not invested yourself. Liabilities consists of short-term and long-term debts. Short-term debt is debt that will only stay on your balance sheet for a maximum of one year. Long-term debt is debt that will remain, and has been, on your balance sheet for several years, for example a bank loan.

Unpaid VAT

At the end of the year you usually have to pay an amount to the Dutch Tax Authorities for the VAT. Unpaid VAT shows the amount that is calculated in Gekko, for the last quarter (Q4), for the payment to the Dutch Tax Authorities.
In Gekko this is always 0 if you have not yet run the Q4 VAT report.

Accounts payable

Creditors include all your outstanding expenses or purchase invoices. The amount of your creditors is a sum of all your gross expenses (costs incl. VAT) that have not yet been paid.
In Gekko you have to indicate that a cost has not been paid yet by marking the transaction type of your cost as 'not yet paid'.

Other debts

These include the remaining debts that do not fall under your liabilities, unpaid VAT, and accounts payable.
In Gekko you can manually enter debts that are not yet saved in Gekko, this will then reduce your equity.

Equity

All the money that you invest in your own business falls under equity. Equity can also be seen as a debt owed by the owner of the company to themselves, because of the money has been invested into its own company.

Profit & loss

Underneath profit and loss all your revenue and costs are displayed, with the final amount at the end being either profit or loss.

Total revenue

The total revenue is a sum of all income from your invoices, excluding the VAT, in the year of your balance.

Unpaid invoices

Unpaid invoices are all invoices, excluding VAT, that have not yet been paid in the year of your balance. This also includes the amount of invoices that have already been paid in the following year.

Payed invoices

Paid invoices are all invoices, excluding VAT, that were paid in the year of your balance. Invoices that are not paid until the following year are being left out.

Corrections

Corrections are a type of income that you can add manually, and sometimes without an invoice. The amount of all your added corrections is shown exclusive of VAT. 

Total costs

The total costs are the sum of all costs, excluding VAT, in the year of the balance sheet. This includes the amount for the write offs of your investments in the year of your calculated balance sheet.

Expenses

Expenses are all your net costs (excl. VAT) in the year of your balance sheet, excluding the write offs of your investments.

Write offs

The write offs are a sum of all the depreciation of your investments in the year of your calculated balance sheet. A write off is part of a cost that is marked as an investment in Gekko, and that will be depreciated over several years.

Profit

The profit is a sum of your total revenue minus your total costs.