If you carry an inventory it is also important to update the inventory value each month to account for all withdrawals (sales) and additions (purchases). Close the books with less runaround. Share this sheet with your accounting team to easily manage your financial month end process and keep everyone on schedule. Use the sheet for monthly, quarterly, and annual tasks. Now the other side of your assets and liabilities are the income and expenses, or what some people call the P&L or Profit Loss Statement. I also like to have a budget listed so I can see if there are any variances. As you can see, everything starts with the prior period’s balance sheet. This is the starting point for all of the reports because it shows the asset, liability, and equity accounts at the beginning of the period. After you have taken your bank statement (the one that was provided to you by the bank), run a report that shows only outstanding items, items that have not yet cleared the bank but have been processed through the accounting software (this is often called a checkbook reconciliation report). This report gives you a total of what is in the bank account, which must match to your balance sheet assets account.