Key Sections of the Balance Sheet

1. Assets (What You Own)

Assets are resources the organization owns and expects to use for future operations. Common assets include:

• Cash, Bank Accounts, and Investments
• Accounts Receivable — Money owed to you by payers like Medicaid, insurance companies, or grant funders. 🔎 Keep an eye on how long receivables are outstanding — the longer they sit, the harder they may be to collect.
• Fixed Assets — Long-term items like furniture, equipment, or leasehold improvement. 🔎 Fixed assets usually show up on your Balance Sheet at their original cost minus depreciation over time.

💡Tip: Don't just look at your bank account balances — consider your "Days Cash on Hand." This measures how many days you could keep operating if no new money came in.

‍2. Liabilities (What You Owe)

Liabilities are debts and obligations your organization must repay. Common liabilities include:

• Accounts Payable - Unpaid bills to vendors, such as rent, utilities, or professional services.
• Credit Cards - The current outstanding balance owed to credit card companies.
• Loans - Borrowed funds, such as EIDL loans, SBA loans, or business lines of credit.

💡 Tip: Know the terms of each liability — your monthly payment, interest rate, and maturity date — so you can plan ahead and avoid surprises.

3. Equity, or Net Assets (What’s Left Over)

Equity represents the difference between what you own and what you owe — essentially, your organization's net worth.

• If assets are greater than liabilities, you have positive total equity.
• If liabilities exceed assets, you have negative total equity.

Within the equity section of your Balance Sheet, you might also see Retained Earnings. Retained Earnings represent the portion of past years’ profits that you’ve kept in the organization, rather than spending. It’s a sign of building financial strength over time.

Where to Start (If You're Feeling Overwhelmed)

If the Balance Sheet feels intimidating, start with the basics:

1. Look at your cash balance. How much money is in the bank? Do you have enough cash to cover the next couple payrolls?
2. Understand your debt. Do you have loans or unpaid bills? Are you continuing to take on more debt to pay your expenses?
3. Build Total Equity. Are you growing your financial strength over time? How can you improve your total equity?

‍Action Plan: How to Use Your Balance Sheet

1. Review  monthly. Build the habit of checking key balances each month.
2. Watch cash and liabilities. Ensure you have enough to cover short-term needs.
3. Monitor total equity growth. Positive movement shows financial strength.
4. Spot red flags. Big changes in cash, receivables, or debt need attention.
5. Understand your obligations. Know your debt terms to avoid cash flow crunches.
6. Involve your team. Finance isn't just for leadership — program leads can help too.

💡 Tip: Not sure how to get your Balance Sheet? Ask your bookkeeper or accountant to send it with your monthly P&L.

Need Help?

Onyx Analytics helps behavioral health providers understand their financial reports. If you're new to reviewing your Balance Sheet, we're happy to walk you through it.
Email us at info@onyxdataanalytics.com to get started.