Balance sheet may not be necessary for many small businesses

MBS Accounting does not believe in preparing a balance sheet for a small business in all cases.

Time after time MBS Accounting have seen new clients whose MYOB Balance Sheets do not make a lot of sense and do not add value for the client but they have spent a lot of time and frustration trying to get them right. This is understandable because double entry bookkeeping can be quite complex and it does take study and practice to master.

Unnecessary professional accounting time can be spent correcting journal entries or starting a balance sheet from scratch. Clients may need to consider whether they are better off not using all the features in their MYOB software but just sticking to the basics. They might be better off keeping a cash book and an assets register.

The more a client mixes petty cash with private drawings then the less value there will be in preparing a balance sheet. The clients taxation return may be a sufficient record of depreciation/capital allowances to be claimed going forward, as long as the assets register is kept up to date.