5 Best Tips to Improve Balance Sheet

When you ask the question, "How to Improve Balance Sheet?" It means, you understood that your balance sheet is showing your company's weak financial health. Now, your work is to strong company's financial health by improving the balance sheet. That is the reason you come to learn the steps to improve the balance sheet. To improve the balance sheet, I am writing 5 best tips which may be help to reach on the way where your balance sheet will improve.

1st Tip : Repay your Old Loans

Every day is the new way for your company. Your company has become habitual to take more and more loan without paying old loan. That is the reason, no more loan, your company will get because your balance sheet is clear explaining that your company's all assets have no capacity to repay. But, I am telling again to you to repay your loan.


a) Go to your friend companies and request. If your friend is true, he will help you.

b) Request to your creditor to reduce the total amount of loan.

c) Request to employee to sacrifice one day salary.

d) You also think any other way to repay loan.

If any one trick will use, your balance sheet will not show excess outside liabilities.

2nd Tip : Increase Cash Operating Profit

For doing every activity, we need money or cash. Your suppliers are not giving you goods on credit because your creditors conversion period is very high. Why? because you have not working capital in cash. Be serious on this point. Track and analysis the ageing reports of debtors. Try to make debtors conversion period too small. Reduce your some expenses. It will increase your surplus cash. Timely payment to creditors will helpful to get more stock on credit and your balance sheet will improve.

3rd Tip : Diversify the Investment

Some bad investment may be default and your balance sheet will become one major risk of your company's liquidation. Because you give your all capital in the form of loan and that loan become default. Your balance sheet is showing this point clear. Now, you have to follow good strategy. One side you have to win your shareholders' trust. Other side, your new investment decision will be more care. Good profit from diversified investment projects will reduce the loss of default loan investment. And one day, there will not any list of default loan because you and your shareholder have developed the power to consume this.

4th Tip : Be Specialize of Off Balance Sheet

I am not saying to become hacker for cheating with others. But you would listen the word ethical hacker. Like this, you have not specialize to hide your certain assets or liabilities through off balance sheet technique but you have to optimize your balance sheet with this technique.

5th Tip : Use the Trick of $1.2 million mansion for $10K

It means to increase the value of dead asset. Suppose, your company has one building in the balance sheet whose value is is just $ 10, 000 but your company has to pay $ 1 million to the public as per the balance sheet. But you are still interested to improve your balance sheet. You will follow trick of $ 1.2 million mansion for $ 10 K. It does not mean that you are cheating in the selling of your building but you have to find opportunity. Right time, right customer and mentioning of right quality of your building may be biggest factor to inflate your building's value. Suppose, you get opportunity for selling your building with $ 1.2 million. With this, you can repay your loan and your balance sheet will show surplus which will increase your capital. Everything is possible, but you have to struggle in right direction with right thinking.

Related : Balance Sheet Analysis



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Accounting Education: 5 Best Tips to Improve Balance Sheet
5 Best Tips to Improve Balance Sheet
Accounting Education
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