Every new business owner or consultant needs to start preparing a quarterly balance sheet for his company. Without the quarterly balance sheet, a company is missing out on some very important financial details. By taking a few minutes to prepare a very thorough and comprehensive annual report, a company will be able to have its accounting statements reviewed more closely and be more easily able to spot any problems early on.
In preparation for this report, every budget for a given quarter should be documented and entered into the balance sheet in full detail. This first draft should include the main categories of expenses which would include salaries, wages, management, and facilities costs.
After that, the supplemental information such as interest expense, depreciation expense, amortization expense, etc. should also be detailed.
It’s also very important to establish what the financial metrics are for the balance sheet. These are the numbers that show how much of your company’s assets, liabilities, and equity can be accurately projected into the future. The most important metric for a balance sheet is earnings before interest, taxes, depreciation, and amortization (EBITDA).
We are primarily interested in gross book value, which is the total money that the company can buy and sell with one transaction. This number tells us how much money the company can actually generate every year. It is also necessary to find out what a company’s net book value is – what it can buy and sell with one transaction.
Any third party that you hire to prepare your report should make sure that they are following the latest IRS reporting guidelines and have done their research. Once this is done, you need to include the net book value of the company in your budget. Once all of these figures are in place, you will be able to run a simulation, which can then be used to come up with an estimate of how much cash the company is going to make in a given year.
There are two different forms of reporting that the balance sheet report should contain. The first form is called the table report, which is a consolidated report of all of the company’s financial transactions, including assets, liabilities, equity, and net book value. The second form is the one that provides a more detailed view of the financial information that is being presented.
Now that you know what to include in a quarterly balance sheet template, you can get started. You should have your budget prepared before hand, so that you know exactly how much it is going to cost you to have it done, and you should have a good set of numbers in hand to use to generate a financial report based on. I hope that you will be able to use this as a learning experience and help you make your company’s financial reports better than ever.