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Know your Numbers: Your Balance Sheet

Know your Numbers: Your Balance Sheet

Knowing your numbers is vital to business success. The Balance Sheet is arguably the most important report, as it measures whether your business's worth is increasing or decreasing. It illustrates the overall financial health of your business; whether it is funded appropriately, if there’s enough cash to pay the bills, and what the owners would have left if it was wound up tomorrow.

Profitable businesses can, and do, go broke if they have a weak Balance Sheet. 

Three common scenarios:

1. Growing sales without an efficient billing or collection system.
 This can result in a situation where you don’t have enough cash to pay your bills. 

2. Borrowing too much money to finance the business.
 If there is a downturn in sales, you could have a situation where you can no longer service your interest and principal repayments (even though you’re still making a profit). 

3. Taking too much out of the business.
 It could be as simple as earning a profit but not leaving enough to pay for tax and asset replacements.

Some critical things to understand:

1. Do you have enough working capital?
 Calculate working capital by taking your current assets (e.g. debtors, stock, and cash) less your current liabilities (creditors, taxes, and loans due within one year). If the number is negative, you’ll experience cashflow strain and weaken your business.

2. How long is it taking to collect your debtors?
 Calculate this by dividing your debtors into your total sales for the year, then multiply the answer by 365. This tells you how many days it is taking you to collect your debtors. The lower the number the better. Compare your debtor days to your normal trading terms on your invoices.

3. How many times are you turning over / replacing your stock each year?
 Divide total sales by closing stock. You can do the same calculation on individual stock items by taking the sales for that item divided by the stock level of the same item. The higher the number the better, as you are converting that stock into cash more efficiently.

4. Is your shareholder current account an asset or a liability to the company?
 If it’s an asset, this means you owe the company money, which is bad news!

5. What return are you getting on the assets you’ve invested in?
 Net profit divided by the value of total assets gives your % return. This percentage can be compared to likely returns from other investments to determine how well your business is performing.

The list goes on and will depend on your type of business. Having real time data for your reports will make your financial health diagnosis more relevant than relying on your last set of annual financial statements.

Some of the calculations above are simplified to reinforce the message (instead of getting into complex 'Accountanese'). Talk to us about how strong your Balance Sheet is and how we can work together to make it stronger.



For us, there is nothing better than a happy customer. Here are just a few that let us know how much we mean to them.

Pete Dungey

Simple, efficient and most importantly, hassle-free.

We found Panthera via our search for a Xero expert. We knew the software we wanted to use, and needed a forward-thinking accountancy partner who could get us up and running, and teach us the ropes moving forward. Tory and her team have always been on hand to answer our questions, and help us to grow as a business, particularly during periods of big change, such as becoming VAT registered. They are always on hand to alleviate any concerns and help to keep our records in order, which makes our year-end accounts an absolute breeze! Being based in Bristol, our relationship is entirely email based, alongside one consolidation meeting at year end - this keeps things simple, efficient and most importantly, hassle-free.

Pete Dungey | Kaleido Grafik Limited
Anita van Eijndhoven

Talk Our Language

The support and service we receive from Panthera Accounting is very good. Everything from regular meetings, a prompt e mail response and the transition of our Xero software (which we find very pro active indeed) has and is all remarkably efficient. We find Panthera talk our language and make any process as painless and easy as possible.

Anita van Eijndhoven | Quidne-IT
Ash & Tim Lane

Panthera brush aside the stereotype of the typical accountant

We got in touch with Panthera Accounting by way of a recommendation; we haven't looked anywhere else since. They are an extremely professional yet relaxed group of people. We were slightly daunted by the idea of accountants but Panthera brushed aside y the stereotypes. They are very understanding when answering any questions we may have. They are completely efficient, offer sound business advice, and are fantastically priced. We will continue to recommend them.

Ash & Tim Lane | Starveacre Fencing
Jayne Johnson

An Asset to my Business!

The whole team at Panthera are great! Working with them has been a huge support to my growing business. They help me to understand the numbers I need to know. They give me technology solutions like Xero so that I can process things quickly and have access to my own figures. They are quick to reply, highly knowledgeable, nothing is too much trouble and as well as making sure that everything is compliant and on time, they are enthusiastic, professional and fun to work with.

Jayne Johnson | Better People
John Baker

Absolute joy - they provide a first class service on every level

Working with Tory and the team at Panthera is an absolute joy - they provide a first class service on every level; from simple Xero issues through to more complicated tax enquiries, they’re always on-hand to help me get it right. I’m certainly not their biggest customer, but I’m always made to feel like their most important one.

John Baker | BKR Solutions
John Castle

Professional and Friendly

I would like to say that Panthera Accounting have helped me with my business accounts for more than 4 years now. They have consistently offered an excellent competitively priced service that works both professionally and in such a friendly way that I would highly recommend them to everyone considering using their services.

John Castle | Ilexanna Limited & Birch Castle Homes Limited
Jonathan Morrison

They are always there to answer queries and sort out issues

I had been with Mr Dunn for 20 years when upon his death Panthera took over the business. They now play a bigger part in the running of my business, they do all the stuff that has to be done but I don't like doing ie book keeping, VAT, wages, and returns. They are always there to answer queries and sort out issues and make sure all Tax deadlines are met. Their costs are fair, service is great and I have and would highly recommend them.

Jonathan Morrison | Wallingford Builders
Pippa Scott

Professional, friendly and personal service.

Panthera Accounting have gone above and beyond the call of duty to guide and support our Company. They offer a professional, friendly and personal service that can take the stressful and sometimes frightening feelings out of running a business. They have guided us through the working of Xero and have offered “teaching sessions” on the day to day running of the accountancy package. Our only regret is that we didn’t join their team earlier.

Pippa Scott | Scott's Commercial Services Limited
Sara Southey

Panthera puts the personal back in to accountancy!

Tory and her team have provided a friendly, approachable and helpful service from the start. They have delivered a quality service, above and beyond anything I could have expected. Panthera, with the help of the Xero package, have taken the stress, strain and confusion out of managing my company and personal accounts. I look forward to working with them for many years to come.

Sara Southey | Bluestones Garden Design
Tracey Miller

Panthera are fantastic.

Panthera are fantastic. Always professional, going the extra mile for their clients and delivering superb service. I recommend them all the time to my clients.

Tracey Miller | Bigger, Brighter, Bolder BBB


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Move to Panthera

Moving to Panthera is as easy as 1,2,3...

  1. We have a short initial discovery meeting (online or in-person) to create the perfect service package for your business
  2. You e-sign your terms of engagement
  3. We get your authority to talk to HMRC on your behalf

And that’s it! From contacting your previous accountant, to updating Companies House with your new registered office address, let us handle all of the admin so that you can get on with running your business, safe in the knowledge that everything is going smoothly in the background.