A Balance Sheet is one of the core financial reports available in Joy Pilot, offering a snapshot of your business’s financial position at a specific point in time. It shows what your business owns (assets), what it owes (liabilities), and what’s left over (equity or shareholder funds).
For freelancers, sole traders, and contractors, this report is especially valuable when it comes to understanding how financially healthy your business is, preparing for tax time, and showing income when applying for things like loans or grants.
📌 Note: This guide is written primarily for a limited company business. If you’re a sole trader, you’re not required to prepare a formal balance sheet — your tax is based on profit alone. That said, a simple balance sheet can still be a useful tool for understanding your business’s financial position.
Why a Balance Sheet Matters for Freelancers, Sole Traders, and Contractors
While the Profit and Loss statement shows how much you earned over time, the Balance Sheet shows where you stand financially today.
Here’s why that matters:
1. Shows Your Business’s Net Worth
Your Net Assets (also known as Owner’s Equity or Shareholder Funds) show the value of your business once debts are subtracted from what you own. This is a strong indicator of whether your business is building value or running lean.
2. Complements Profit and Loss Reporting
Your Profit and Loss account appears in your Balance Sheet under Capital and Reserves. This means your business’s historical profits and losses contribute to your overall equity. Together, both reports give a full picture of your performance.
3. Useful for Tax & Take-Home Planning
While not used directly to calculate income tax, your Balance Sheet can help track how much cash is potentially available for personal drawings or take-home payments. It also highlights tax liabilities, such as corporation tax or sales related taxes (e.g. GST, VAT, or similar).
4. Important for Loans, Mortgages, or Financial Reviews
Whether you’re applying for a mortgage or a business loan, a Balance Sheet helps prove your business’s solvency, stability, and net position—especially when combined with your Profit and Loss Statement.
How to View Your Balance Sheet in Joy Pilot
To generate your Balance Sheet in Joy Pilot:
Go to the Reporting section in your Joy Pilot dashboard
Select Balance Sheet
Choose your reporting period (e.g., end of month, quarter, or year)
Click Create Report
Use the blue Download button (next to "Create Report") to download your results as a PDF or CSV file
Reading Your Balance Sheet: Key Sections
The Balance Sheet layout in Joy Pilot is structured for clarity. Here's what each section means:
Assets
Assets are what your business owns or is owed.
Current Assets include things like Trade Debtors (clients who owe you money)
These are short-term assets expected to be converted to cash within 12 months
➡ Total Assets is the sum of everything the business owns or is owed
Liabilities
Liabilities are what your business owes.
Trade Creditors are unpaid bills to suppliers
Corporation Tax is tax owed on profit (shown for companies)
Other liabilities may include sales related taxes, employee-related tax obligations, or loan repayments (e.g. GST, PAYG, VAT, etc.).
➡ Total Liabilities shows everything your business owes at that point in time
Net Assets
This is calculated as:
Total Assets – Total Liabilities
It represents your business’s net worth and is often used by accountants to assess financial strength.
Capital and Reserves
This section shows your accumulated profit or loss over time.
The Profit and Loss Account value here reflects past performance
For sole traders, this might be treated as owner’s equity
For companies, this would appear as part of Shareholder Funds
Shareholder Funds / Owner’s Equity
The final section confirms the overall position of the business: Net Assets = Capital + Reserves + Shareholder Funds
In sole trader setups, this figure reflects what’s effectively your ownership stake in the business.
Reporting Obligations and Record Keeping
As a business owner, you are required to keep financial records and report income and tax correctly to your country’s tax authority. Your Balance Sheet is part of that overall financial story.
What You Should Watch For (Anywhere You Operate):
Keep your Balance Sheet up to date, especially at the end of financial years
Track liabilities, including tax debts or unpaid suppliers
Combine it with your Profit and Loss to provide full reporting when required
Download and store copies regularly for compliance and audits
📌 Most countries require you to keep financial records (including reports like Balance Sheets) for at least 5–7 years
Helpful Links by Country
Australia – Australian Taxation Office (ATO)
New Zealand – Inland Revenue (IRD)
United Kingdom – HM Revenue & Customs (HMRC)
For users outside these regions, consult your local tax authority or a qualified accountant to understand what reporting is required.
Summary – Making the Most of Your Balance Sheet
Your Joy Pilot Balance Sheet gives you a clear view of your business’s current financial standing. It shows what your business owns, what it owes, and what’s left over—a vital report for decision-making, compliance, and planning.
Use it to track your business’s value over time
Combine it with your Profit and Loss Statement for a complete financial picture
Download it any time as a PDF or CSV for sharing or record keeping
Stay on top of liabilities, and make sure your records align with reporting requirements in your country