An important part of running your art business or any business for that matter is to be able to understand your financial statements and use this information to better manage your business. You may get these statements from your accounting system, your accountant, bookkeeper or even on your phone. In this article I am going to take a look at one of the most basic yet most useful reports – the Balance Sheet. The balance sheet is a financial report which you may have seen or even prepared if you have ever applied for a home or other type of loan.
Unlike the Income Statement which measures your financial activity over a period of time like a month or year, the balance sheet measures your financial condition at a point in time and not over a period of time like a year, quarter or month. This point in time is a date where a “snapshot” of your financial condition was taken. These points could be December 31, 2014 or any other date in the past of your choosing. One of the advantages of using an accounting system is that you can create a Balance Sheet by pressing a few buttons.