Questions about the balance sheet
Questions about the balance. Self-employed bookkeeper you get
- Insight into your financial affairs
- We compile the income statement
- Ditto for the balance sheet
- We keep accounts receivable and accounts payable?
- We will help you by means of a reminder for the submission of documents and deadlines from the tax authorities
- We keep a digital archive of your most important documents
- We file the income tax return
- We take care of the quarterly sales tax return
Many self-employed people knocked on the door of a self-employed accountant with the question what is actually
- A Balance Sheet
- and what a profit and loss statement
- And whether this is sufficient to include in the profit declaration
- Or that special financial statements with explanatory notes to the balance sheet and profit and loss account must be drawn up.
Below we answer the most frequently asked questions to self-employed accountants
- What is a balance sheet?
- What Are Assets/Possessions
- When is an investment a property, plant and equipment
- Current assets are e.g.
- Cash and cash equivalents are
- A balance sheet for the self-employed as of 31-12-2019
- What is a Profit and Loss Statement?
- The profit and loss account is often divided into these items
- At the end of the year, you will receive the pdf’s of
- Many self-employed people want annual accounts, is that mandatory?
What is a balance sheet?
As at 31 December 2019, the balance sheet shows
- an overview of the assets/possessions
- – which are on the left- ,
- and liabilities/liabilities
- –these are on the right-hand side –as is equity.
- The left side – debit – and the right side – credit – are always balanced…..
What Are Assets/Possessions
We only describe two types of assets here.
Fixed assets are investments that are tied to your company for more than one year, such as
- your property,
- car,
- computer
- inventory.
When is an investment a property, plant and equipment
- However, it concerns investments that amount to more than 450 euros excluding VAT, otherwise they are direct costs.
- The fixed assets are depreciated annually.
- The balance sheet shows the value as at 31 December.
Current assets on the balance sheet are e.g.
- stock
- Debtors
The cash and cash equivalents on the balance sheet are
- Positive balance of the bank
- and cash balance on 31-12 of the financial year.
Liabilities consist of
- shareholders’ equity,
- Debt capital longer than 1 year
- Loans longer than 1 year, e.g. mortgage, loans or financing for the purchase of a car
- and debt capital less than 1 year.
- Short Term Loan, Accounts Payable, Bank Overdraft
A balance sheet for the self-employed as of 31-12-2019
Amounts are in euros
Debit/Assets, Credit/Liabilities
Car 10,000
Inventory 1,000 Fees to be paid 1500
Inventories 500 euros Accounts payable 2,000
Accounts receivable 1500 euros Shareholders’ equity 10,500
Bank 1000
Total Euro 14.000 Total 14.000
What is a Profit and Loss Statement?
The profit and loss account provides insight into the costs and revenues of your self-employed company.
- This shows your turnover excluding VAT
- and the costs excluding VAT
- sorted by cost group.
The profit and loss account is often divided into these items
- Turnover
- Purchase
- Work third parties
- Gross margin.
- Depreciation of property, plant and equipment
- Operational costs. Such as car expenses, selling expenses, general expenses, housing costs
- Operating.
- Financial income and expenses. E.g. bank charges
- Depreciation.
- Operating profit before depreciation.
At the end of the year, you will receive the pdf’s of
- your balance sheet as at 31 December,
- the profit and loss account for the past financial year
- So that you have everything digitally in-house for when you need to deliver data to the bank or mortgage lender
- or if you want to look at your data on your
- tablet
- PC
- laptop
- or smartphone.
Many self-employed people want annual accounts, is that mandatory?
This is not mandatory and can therefore save you money. As a self-employed person, you only need to have a balance sheet and profit and loss account drawn up at the end of the year.
Therefore, you do not have to agree to your accountant’s proposal to draw up annual accounts. Such annual accounts are a booklet with an extensive balance sheet and profit and loss account – with explanatory notes and key figures – and cost many hundreds of euros.
However, the annual accounts can be useful in other situations. Banks are not always satisfied with the printout of the balance sheet and profit and loss account when applying for a loan or mortgage.
In that case, we will still draw up the annual accounts, but you have freedom of choice. If you request us to make one, we will send you an additional invoice.