Fill in your details below and one of our friendly consultants will call you back as soon as possible.
  • This field is for validation purposes and should be left unchanged.

Follow us on Twitter

  • RT  @TyronneNel : #SME Advice - It might be late but just remember success doesn’t keep office hours! 2 hours ago
  • RT  @TyronneNel : #SME Advice - Dear entrepreneur, employ the most skilled employees you can afford! Poorly skilled staff are worse for your… 1 day ago
  • Is your business idea viable⁉️ Is there anything you can do to improve my idea’s chances of success⁉️ ✅✅YES! Find… 2 days ago
  • Owe money to SARS for inaccurate or non-submissions? SARS has become more "friendly" that will help you come right.… 4 days ago
  • Always at the forefront #innovation 5 days ago
  • RT  @TyronneNel : #SME Advice - Dear entrepreneur, the quickest way for you to become a big business, is to be a BETTER business! Do your ad… 6 days ago
  • RT  @capetownoffice : Tune in to Mix 93.8 FM at 13h30 today & give a huge shout out to Roland Albertson who'll be taking over! #coworkers #… 7 days ago
  • RT  @ProcessMechanic : Ditch the paperwork & start using an online platform to plan and manage the growth of your business. Sessions cover #… 7 days ago
  • RT  @capetownoffice : The latest The Office ! Thanks to  @TyronneNel   @carlo_petersen   @harry_kane1  #coworking #capetown 7 days ago
  • Government needs to create an enabling environment for entrepreneurs by developing policies that GROW businesses, i… 1 week ago
  • RT  @BonganiNtuli : Three weeks from opening my spot in Bryanston, kinda scary cos Im not a social person, but ill get it done nonetheless. 😊… 1 week ago
  • RT  @innovsummit : Monday is the last day to catch your ticket to THE leading innovation & entrepreneurial ecosystem platform! Will we see y… 1 week ago
  • RT  @capetownoffice : My fellow South Africans... I feel we need more discussion on this new reality. Holy shit. #PetrolPrice #PetrolPriceHik… 1 week ago
  • RT  @ProcessMechanic : If you're going to pitch or present & your audience is given the opportunity to ask questions, make sure you listen to… 1 week ago
  • RT  @TyronneNel : #SME Advice - Dear entrepreneur, make time for family and friends, don’t forget, they’re walking this road with you 😉 2 weeks ago
  • RT  @Workshop17za : Workshop17 Firestation in Rosebank will welcome more than 300 members to our space opening in November! Reserve your offi… 2 weeks ago
  • RT  @ProcessMechanic : If you're about to launch an app/web service, make sure you have a strategy to grow an audience that you will direct t… 2 weeks ago
  • RT  @TyronneNel : #SME Advice - Dear entrepreneur, the one characteristic that separates successful from unsuccessful businesses is the unrel… 2 weeks ago
  • RT  @TyronneNel : #SME Advice - The Customer is Not always right.... but it’s probably your fault for making them believe they always are.😉 3 weeks ago
  • RT  @TyronneNel : #SME Advice - Customers might pay for your product/ service, but what they are buying is confidence that it will solve a p… 3 weeks ago

Subscribe to our mailing list

* indicates required
 In News

You dont need to be an accountant to understant your income statementOne of the most common responses we encounter during meetings with clients is, “Sorry! I’m not an accountant, so I don’t know a thing about my Income Statement or Balance Sheet!” Well, here is the good news, you DON’T need to be an accountant to understand them.

As you saw from our previous blog there is no mystery around accounting terms like DEBTORS, CREDITORS, CASH FLOW, AGE ANALYSIS, etc. and your INCOME STATEMENT and BALANCE SHEET are no different.

Put very simply, your Income Statement (as the name implies), tells you what your income is for a particular month or year. Essentially it is a record of all your Sales less all your Expenses for that particular month or year.

The reason this is important, is every business needs to know if it is making a Profit (good) or a Loss (bad). The knowledge of either position is incredibly valuable when planning your businesses future.

Your Balance Sheet (once again as the name implies) reflects the balances owing either by your business or to your business for a particular month or year. Essentially it is a record of your businesses wealth, your Assets (good) less your Liabilities (bad).

The reason this is important, is every business needs to know if its Assets exceed its Liabilities. Should your business assets not exceed its liabilities, it is Insolvent and you may not trade if your business is insolvent!

The reason we look at them together is that they are interrelated. Essentially all the sales (debtors) for a particular month or year are recorded on your income statement and those clients who have not yet paid are recorded on the balance sheet as assets.

The same applies to your expenses, all expenses (creditors) for a particular month or year are recorded on your income statement and those accounts that you have not yet paid are recorded on the balance sheet as a liability.

Your profit or loss is also recorded on your balance sheet thereby putting together a comprehensive picture of your businesses health.

Your Income Statement and Balance Sheet makes up your management accounts and together they are a very powerful tool in assisting you to manage your business as all the important information you will require is in one easy to find place.

Now that we have covered the framework of what makes up your books of account, next time we will look at what you can claim as income and more importantly what are expenses……


[contact-form][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Website’ type=’url’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form]
Recent Posts

Leave a Comment

Start typing and press Enter to search

Statutory registrations for your business - Phezulu VBO