Guide to assets & liabilities for small businesses

Assets:

Assets are essentially what your business owns that has value. These could be physical items like office equipment and inventory or financial assets such as cash in bank accounts and money owed to you by customers (accounts receivable). For Thriday users, managing these assets becomes streamlined:

• Asset and liability register: Simply add your assets, like vehicles, laptops, phones or tools to the asset register and Thriday calculates the depreciation Thriday will automatically calculate and apply depreciation to the relevant assets using the simplified depreciation rules based off the ATO’s guidelines. For assets excluded from the simplified depreciation rules, you can refer to the ATO guidance here: ATO Depreciation Guidelines.
• Cash Management: With up to ten built-in bank accounts, Thriday simplifies how you manage and allocate your business cash. This can boost your liquidity management, helping you maintain enough cash on hand for emergencies or opportunities.
• Receivables: Thriday’s real-time financial reports allow you to keep an eye on accounts receivable, ensuring you know how much money is due and when.

Liabilities:

Liabilities represent what you owe, which might include loans, accounts payable, or taxes due. For anyone using Thriday, liabilities are less of a headache due to several automated features:

• Asset and liability register: Add your liabilities including loans and tax payments etc. When a loan repayment is made from a Thriday account, you can select the loan from the Chart of Accounts dropdown. This makes accounting and tax and absolute breeze.
• Automated Bill Payments and Bookkeeping: This reduces the chance of missing payment deadlines, which can lead to late fees or damaged credit.
• Tax Calculation and Forecasting: Thriday automatically calculates your taxes payable, integrating this into your financial planning so there are no surprises come tax time.

Why It Matters:

Understanding your assets and liabilities helps you determine your net worth, which is a crucial indicator of financial health. Thriday enhances this process by:

• Real-time Financial Health Monitoring: Instantly see your financial status through Thriday’s dashboard, which can help you make informed decisions quickly.
• Automated Accounting: This feature reduces the need for manual calculations, making it easier to maintain an accurate and current understanding of your business’s financial position.

Keeping Track:

Good record-keeping is vital. Thriday offers automated bookkeeping and accounting, ensuring that your asset and liability records are always up-to-date. This means less time spent on manual entries, more deductions in your pocket and more time back in your days, weeks, months and years.

Additional Tips:

• Maintain a Healthy Balance: Aim for a positive net worth. Thriday’s tools for cash flow management and budgeting can help you keep your finances on track.
• Manage Debt Wisely: While Thriday makes managing your finances simpler, always consider the implications of taking on new debt versus the potential growth it might bring.
• Seek Professional Help: Though Thriday simplifies financial management, consulting with a professional can provide tailored advice, especially for complex situations.

By leveraging Thriday, small business owners in Australia can not only keep a precise track of their assets and liabilities but also enjoy streamlined financial operations and insights that support smarter decision-making and business resilience.