The balance sheet

Tips on important parts of the balance sheet that can help you estimate liquidity, flag a negative result and more.

Tips on important parts of the balance sheet that can help you estimate liquidity, flag a negative result and more. Everything about the balance sheet below!

Liquidity, negative result and unpaid transactions: keep an eye on the balance!

The balance sheet is a good report to keep an eye on. As an accounting consultant you must always know how the accounts in the balance sheet reach “zero”. It is actually not a bad idea to keep track of it as a company owner or finance manager either. Does anyone owe you money, and when will they pay it in? Or is it perhaps the other way around? In Kleer’s balance sheet there is not much you need to configure to get the information you need, but it can be good to know what you are looking at. Below are some tips on accounts and concepts.

How do I know that all payments are booked?

In Kleer your bank transactions are fetched once a day, and customer invoices and supplier invoices are reconciled automatically. Sometimes one of your customers writes the wrong reference number and the transaction does not know where to go. In your view this transaction will of course be visible on the bank account in Kleer, but as you know the accounting must be balanced, and the amount is then found on account 1615 for the time being. Manual transactions that you have sent yourselves in the internet bank, where the system has no basis to match against automatically, also end up on the same account.

If SEB is your bank, however, you can get transactions in every 15 minutes! Read more on our blog or contact your Kleer consultant to find out more about the service.

Why is it important to keep 1615 free from transactions?

Transactions that have come in or gone out of your bank can affect both revenue and costs, which in turn affects the company’s equity and result, which is why this account should be empty. Some of the manual transactions that are not matched automatically can be, for example, one of the examples below:

Payments to the Swedish Companies Registration Office, shareholder contributions, new share issues or certain foreign payments.

Can’t my consultant be responsible for the transactions without supporting documents?

Your consultants have a special page in the system where these transactions “get stuck”, to see in a simple way which transactions lack supporting documents. They are always booked against the account that refers to the bank, but if there is no supporting documents they end up on account 1615, or what the consultants call the bank tab. The transactions are reconciled, and the consultants email you if they lack supporting documents for the amount. It is not always easy to determine what the transactions refer to, and we therefore need your help on these occasions. The bank does not always provide all the information, and we then need to ask the person who made the payment, who can in turn explain what has happened and send us the supporting documents.

What can I do as finance manager?

1. Are you aware that you have made manual payments in the internet bank? Send the supporting documents directly to your Kleer consultant, and they will book the transaction for you.
2. Do you see an amount on 1615 when you go through your balance sheet? Click into the account and see whether you can determine what the amount refers to. If you recognise the transaction, send the supporting documents to your consultant. If you do not know what the transaction refers to, get help from your consultant to sort it out!

How do I keep track of my liquidity?

There is a lot of talk about liquidity. How do you actually keep track of what is coming in and what is to be paid out? You know your business best, but we have shared a few accounts below that you can always keep in mind.

Accounts receivable

On account 1510 you find the amount that your customers are obliged to pay in to you in the near future. However, you need to take into account whether any of these invoices will most likely not be paid. Ask your consultant to adjust it in the accounting if needed.

Accounts payable

You find accounts payable on account 2440 in the balance sheet. They refer to short-term liabilities that you are expected to pay in the near future, and are therefore good to include in your liquidity calculation.

Salaries and expenses

Every month you need to pay out salaries to your employees, including the expenses they have submitted during the month. A tip is then to look in the salary statistics report to make an estimate of what you pay out monthly.

The Swedish Tax Agency

The Swedish Tax Agency is also a party that needs to be paid on time, in addition to your suppliers. When the payments are to reach the Swedish Tax Agency can however vary from company to company. What you are to pay in can also vary depending on what the company is registered for at the Swedish Tax Agency. Usually the following need to be paid in: social security contributions and tax deducted, VAT, preliminary tax (F-tax) and corporation tax (annually).

What is actually to be paid to the Swedish Tax Agency, and how do I see it?

Below we go through VAT, social security contributions and F-tax one at a time.

VAT

How often VAT is to be paid differs from company to company. Either per month, quarter or year. You can even lack registration for VAT, and you then may not claim input VAT or invoice with VAT.

VAT consists of output VAT, input VAT and fictitious VAT. Output VAT is specified on your customer invoices and is to be paid in from you to the Swedish Tax Agency. The input VAT is on the supplier invoices you receive, and you are then to receive it back from the Swedish Tax Agency. But instead of paying in a certain sum in output VAT and then getting the input VAT back, you add the amounts together and only pay the difference. It is booked on separate accounts continuously during the month, and when the VAT is to be submitted it is combined on one accounting account, and then emptied when you either have been paid by the Swedish Tax Agency or pay the sum in to them. There is also talk of fictitious VAT. This applies when you buy services from a company registered abroad that are used in Sweden. “Fictitious VAT” is then booked, which really means that no VAT that is to be paid is booked, but it must be reported to the Swedish Tax Agency.

See the four most common VAT accounts below. You may have more accounts for VAT than the ones below, and the amounts are then booked on accounts between 2600 and 2699.

The consultant books the VAT in connection with the return, and it is only then that it is reported on one combined accounting account. Before that you look at all the accounts for VAT to get an idea of what is to be paid. This is most easily done by clicking into the VAT report, where a summary is presented.

2610: Output VAT

The output VAT is usually booked against this account. It is booked when you authorise a customer invoice, on the invoice date. Output VAT is a liability that you have to the Swedish Tax Agency.

2641: Input VAT

When you have authorised receipts and invoices from suppliers, the input VAT is booked on an accounting account in the balance sheet. Input VAT is a receivable from the Swedish Tax Agency, and is therefore an amount you get back, or usually may deduct against the output VAT that you owe the Swedish Tax Agency.

2650: VAT liability

If the company owes the Swedish Tax Agency more in output VAT than has been booked in input VAT, the difference becomes a liability and is then booked against account 2650.

1650: VAT receivable

If the difference is a receivable from the Swedish Tax Agency, it means that you are to get money back from them. The amount is then booked against 1650 and becomes zero when you receive the amount in your bank account from the Swedish Tax Agency.

Social security contributions

2710 & 2730 Social security contributions and tax deducted

On these accounts you book what is to be paid in to the Swedish Tax Agency for the employees’ salaries. If the salaries are at roughly the same levels every month, an estimate can be based on earlier months’ payments.

F-tax

Every month the company usually pays preliminary tax (F-tax) to the Swedish Tax Agency. The amount is decided once a year, unless you actively choose to submit a preliminary income tax return to the Swedish Tax Agency for a particular reason. The F-tax is based on the result that was declared to the Swedish Tax Agency in the company’s income tax return two years back. See more in the decision from the Swedish Tax Agency. The F-tax therefore affects your payouts monthly.

When do I need to worry about a negative result?

If you have a negative result, make sure that it is lower than your equity. If it is higher, the equity is depleted and action needs to be taken. Of course your consultant should inform you about this, but it is good to understand how you read your balance sheet, to be involved in the company’s finances. In the end it is you who are responsible for your finances.

Where can I see whether the equity is depleted?

In the company’s balance sheet the equity is summed in a separate part. Both the share capital is specified and the total profits or losses you have made over the years. New share issues in the form of share premium reserve and increased share capital also belong to the equity, as do shareholder contributions.

Together this sums to the company’s equity.

How do I do a control calculation of whether it is depleted or not?

As long as your negative result does not exceed the equity excluding half of the share capital, it is not depleted. Exceeds means that the negative amount is larger (further from zero) than the equity.

Example of a fictitious balance sheet in Kleer with depleted equity

When the result is negative you need to reconcile it against your equity. An example: the result is depleted by SEK 573,344.52 according to ((-150,000 + (50,000/2)) - (-698,344.52)) = SEK 573,344.52.

What do I do if we have depleted equity?

If your equity is depleted, you must take action immediately. You need to draw up a control balance sheet (kontrollbalansräkning), where the company’s business is assessed and the real values of assets and liabilities are valued. After eight months you will need to draw up a further control balance sheet, where the company’s ability to continue the business is assessed again.

How do I restore the equity?

1. Either if you can show that you will have increased revenue in the near future and know that you will catch up on the negative result you have had.

2. Alternatively you increase the share capital through shareholder contributions, which thereby increases the share capital and the room for your negative result.

What happens if you do not restore the equity?

1. If it is restored when control balance sheet 2 is drawn up, no further action needs to be taken, and the business can be run on.

2. If the equity is still depleted, the company needs to decide on liquidation.

Who can see the balance sheet?

The balance sheet can only be seen by two different permission types.

Finance managers

Finance manager is the role for the person who should be able to see everything in Kleer, often the CFO, the CEO or a finance administrator. That permission includes this report too.

Full read access

Your auditor, potential investors and board members. There can be people around your company who should be able to see all the accounting and all the information, but not be able to do anything administrative in the system. They see all parts of the system.