Understanding the Balance Sheet

What is a Balance Sheet?

A balance sheet is a financial snapshot of your real estate business at a specific time, detailing assets, liabilities, and owner's equity. It’s helpful to understand liquidity (cash on hand and other short term assets), fixed investments (land, property, cap-ex), short term liabilities (e.g., security deposits), long term liabilities (mortgage debt, other loans), and then owners equity (contributions, distributions, and profits held in the business). 

How do I generate a Balance Sheet in Azibo?

Azibo helps rental property owners easily generate a Balance Sheet report for all their properties, specific portfolios, or specific properties, at any point in time. To create a Balance Sheet in Azibo, follow these simplified steps:

• Add all your properties to your properties dashboard, then navigate to Reports -> Balance Sheet report.
• Initiate your balance sheet by manually entering key information for each property from a specific start date. You should get this from an existing balance sheet that you or your accountant has. It’s easiest to start with a Balance Sheet as of the end of a specific year, and then do all your bookkeeping in Azibo from the following year forward. Note - you can adjust your starting balances at any time by selecting “Edit Beginning Balances” in the Balance Sheet report.
• Import all rental business transactions automatically by linking the relevant bank or credit card accounts. Transactions can also be manually recorded in the same tool. 
• Use our bookkeeping tool to assign each transaction to a property and category from our Chart of Accounts. Watch demo below for more info.
• Go to Reports -> Balance Sheet Report to generate your Balance Sheet.

What is included in Azibo’s Balance Sheet?

Section	Definition
Assets	Lists out all of your asset accounts by sub account type, category, and subcategory.
Current Assets	Lists out the values of all of your current assets, the main one being cash.
Fixed Assets	Lists out the values of all of your fixed assets such as the book value of land, buildings and and other depreciable assets. This section also contains your accumulated depreciation and amortization.
Other Assets	Lists out the values of any other assets you may have such as other investments, loans made to the owner, or construction in progress.
Liabilities	Lists out all of your liability accounts by sub account type, category, and subcategory.
Current Liabilities	Lists out the values of all of your current liabilities such as deposits held and credit card balances.
Long Term Liabilities	Lists out the values of all of your long term liabilities, the major one for real estate investors typically being mortgage loan balances.
Equity	Lists out the values of all your equity accounts by sub account type, category, and subcategory.
Owner’s Equity	Lists out all of the contributions made by owners into the business and distributions taken out of the business.  Also contains the Initial Balance Plug which is a calculated value that forces your Starting Balances to balance.
Retained Earnings	Retained Earnings contains the accumulated profits (or losses) for your rental property business. Net Income is the current year net income from the P&L.  Retained Earnings is the sum of all prior year Income plus your Starting Balance retained earnings.
Total Liabilities and Equity	This is the sum of Liabilities and Equity. This amount should equal your total Assets.