The balance sheet is a management document
The balance sheet shows the company’s financial position: assets, liabilities and equity. In Algeria, it must be prepared from SCF accounting records and supported by reviewed accounts.
For a manager, the balance sheet answers practical questions: what does the company own, what does it owe, what cash is available, what customers still owe, what suppliers and tax bodies are waiting for, and whether inventory is valued correctly.
Assets to review
Assets include fixed assets, inventory, receivables, cash and other resources. The sensitive points are often depreciation, old receivables, doubtful customers, inventory cost, stock losses and bank reconciliation.
Inventory deserves special attention. A quantity may exist physically but be overvalued if it is obsolete, damaged or difficult to sell.
Liabilities to review
Liabilities include supplier debts, loans, tax debts, social liabilities and other obligations. Payroll, CNAS and IRG balances should reconcile with the payroll module. VAT and IBS balances should reconcile with declarations and payments.
An old liability balance is not automatically wrong, but it must be explained.
Link with the ledger
The balance sheet is only credible if it can be traced back to the trial balance, general ledger and supporting documents. A clean presentation without account review is weak.
Monthly review checklist
Before closing a month, list receivables older than the normal payment cycle, supplier balances that do not match invoices, social and tax balances still unpaid, inventory accounts with unusual movement and bank accounts not reconciled. This review is practical: it tells the manager whether the balance sheet reflects real business events or only unreviewed accounting totals.
The balance sheet should also be read with the financial statements. If the income statement shows profit but the balance sheet shows weak cash and old receivables, the business needs collection and cash-flow action, not only accounting validation.
Official references
FAQ
Why can the balance sheet be wrong if debit equals credit?
Because double-entry equality only proves mathematical balance. It does not prove that each account is justified.
What should be checked monthly?
Receivables, suppliers, bank, VAT, payroll liabilities, inventory and suspense accounts.
Takeaway
A balance sheet is useful when it tells a credible story. That story is built by reviewing the accounts before the statement is produced.