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Accounts, Reports, Basic Solvency

The “Basic Solvency” report shows…

  • what you’ve got in all of your bank accounts, plus
  • all payments and receipts that have been made but not yet reached the bank accounts, plus
  • everything you are owed, minus
  • everything you still owe
  • …and thus basically shows your solvency position. For your true solvency position you should use the Balance Sheet report, but this includes depreciation, pre-payments, accruals, directors loans and so on, that you might not be familiar with, so you are probably better off referring to the Basic Solvency report, except at year ends when your auditor helps produce your true Balance Sheet.

    Debit Good – Credit Bad

    Because banks have always issued statements from their point-of-view (i.e. not the point-of-view of you, the customer) people imagine that “being in credit” is good. Well it is not. You want debtors, not creditors. You want the bank and your customers all to owe you money, not the other way around. Hence when you read this report you should see a net Debit situation, or else you’ll be in trouble.

    Send Report by Email

    If you need to send this report to a regulatory body, such as the FSA, you can export it to a Word document or Excel spreadsheet via the “Arrow-into-Envelope” icon at the top left (see “Reports, Printing and Exporting Lists to Word or Excel”). Having thus saved it as a computer file you can then attach it to an Email to be sent to the regulator.

    VAT Liability  

    If your business is VAT registered then you MUST add the VAT Control to this report, as VAT appears in your bank account even though it is not your money. You can add this control quite easily via the User-defined Report Writer (see “Reports, Accounts, User-defined Report Writer”).

    Tailoring the Report with Other Controls

    Just like with the VAT Control, above, you can add any other control accounts you wish, via the User-defined Report Writer. However bear in mind that this report is supposed to be simple and basic. If you need a complete report on your solvency use the “Balance Sheet” instead.