Knowing your liabilities based on their liquidity is important for obvious reasons when you think about it. Every reasonable accountant or careful owner is interested in knowing which liabilities they are to be settling first and which still have time until the payment is due.\u00a0<\/p>\n
Having an overview of the structure of your company\u2019s liabilities ensures you\u2019re also able to plan your funds accordingly. Under normal circumstances it\u2019s not an issue however if you\u2019re dealing with seasonal or very fluctuating cash inflows it\u2019s crucial you understand when and what amount needs payment. Not to advertise bad payment discipline, but sometimes it\u2019s worth keeping those big suppliers happy with correct payments made on time and keep those less important \u201changing\u201d for some time until you get enough funds to settle their balances. I\u2019m going to stress this again, it\u2019s not meant as entertaining bad payment discipline ideal, but merely as giving food for thought. Note here that your clients may use the same approach every now and then just as same.<\/p>\n
When you\u2019re most probably not dealing with fluctuating incomes, you\u2019re still better off knowing which balances are due within next 12 months because this is what your current assets should cover \u2013 assets you should be able liquidate within the same period you\u2019re to settle your current payables. This is called being a going concern, i.e. being able to continue in business in a foreseeable future.<\/p>\n","protected":false},"excerpt":{"rendered":"
Knowing your liabilities based on their liquidity is important for obvious reasons when you think about it. Every reasonable accountant or careful owner is interested in knowing which liabilities they are to be settling first and which still have time until the payment is due.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28,48],"tags":[],"class_list":["post-3853","post","type-post","status-publish","format-standard","hentry","category-4-reporting","category-4-3-balance-sheet"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3853","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=3853"}],"version-history":[{"count":1,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3853\/revisions"}],"predecessor-version":[{"id":3854,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3853\/revisions\/3854"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=3853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=3853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=3853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}