Reading your reports

Sapita builds a few reports from the same books. Each one answers a different question: how much the company owns and owes, whether it made a profit, how much cash it has, and how much VAT it owes. This lesson explains the main reports in plain words.

The balance sheet

The balance sheet is a picture of the company on one day. On one side are the assets, what the company owns, such as cash, receivables and equipment. On the other are the liabilities and equity: what it owes, and what belongs to the owners. The two sides always match.

The profit and loss report

The profit and loss report covers a period, such as a month or a year. It adds up the income and takes away the expenses. The result is the profit or the loss. A profit in the report does not mean there is cash in the bank, because the sales may not have been paid yet.

Cash position

The cash position shows how much money the company has in its bank and cash accounts today, and how much is due in and out soon. Read it together with the due dates of your receivables and payables.

Receivables and payables

Receivables are the amounts your customers still owe you. Payables are the amounts you still owe your suppliers. Both have due dates. An overdue receivable is one where the customer has not paid by the due date.

The VAT report

The VAT report shows the output VAT, the input VAT and the amount to pay or reclaim for each period. It matches the KMD return, so compare the two when you file.

Reading them together

Start with the cash position, then look at the profit and loss for the month, then the balance sheet. If a figure surprises you, follow it back to the entries that make it up. Sapita lets you open each figure and see its source.