Balance Sheet - Agatabo

What is a Balance Sheet?

The Balance Sheet (also called Statement of Financial Position) shows what the organization owns (assets), owes (liabilities), and the net worth (equity) at a specific date. It’s a snapshot of financial position at a single moment in time.

The accounting equation: Assets = Liabilities + EquityThe balance sheet must always balance. If it doesn’t, there’s an accounting error.

API Endpoint

Get balance sheet report:

GET /reports/balance-sheet?asOfDate={date}
Headers:
  x-organization-id: {organizationId}

Query parameters:

Parameter	Type	Required	Description
`asOfDate`	string (ISO date)	No	Snapshot date for balance sheet (YYYY-MM-DD). Defaults to current date if omitted.

Response structure:

{
  "message": "Balance sheet report fetched successfully",
  "data": {
    "asOfDate": "2026-06-30T00:00:00.000Z",
    "assets": {
      "cashAndBank": 5000000,
      "loansReceivable": 15000000,
      "interestReceivable": 500000,
      "penaltyReceivable": 50000,
      "physicalAssets": 3000000,
      "physicalAssetsBreakdown": {
        "cashPurchase": 2500000,
        "collateral": 300000,
        "gift": 200000
      },
      "additionalItems": [],
      "total": 23550000
    },
    "liabilities": {
      "organizationUserSavings": 18000000,
      "borrowerSurplus": 50000,
      "additionalItems": [],
      "openingEquity": 1000000,
      "retainedEarnings": 3000000,
      "currentPeriodNetIncome": 500000,
      "reserves": [
        { "name": "Emergency Fund", "amount": 800000 },
        { "name": "Loan Loss Reserve", "amount": 200000 }
      ],
      "otherEquity": 0,
      "additionalEquityItems": [],
      "total": 23550000
    },
    "isBalanced": true
  }
}

Report Structure

Assets Section

Current Assets:

Line Item	Account Role	Description
Cash and Bank	CASH	Cash on hand and bank account balances
Loans Receivable	LOAN_RECEIVABLE	Outstanding loan principal
Interest Receivable	INTEREST_RECEIVABLE	Accrued interest not yet paid
Penalty Receivable	PENALTY_RECEIVABLE	Accrued late payment penalties

Fixed Assets:

Line Item	Account Role	Description
Physical Assets	FIXED_ASSET	Equipment, furniture, buildings
- Cash Purchase	FIXED_ASSET (CASH_PURCHASE)	Assets purchased with cash
- Collateral	FIXED_ASSET (COLLATERAL)	Assets acquired as loan collateral
- Gift	FIXED_ASSET (GIFT)	Donated assets

Additional Assets: Custom asset accounts (non-system roles) with non-zero balances. Total Assets: Sum of all asset line items.

Liabilities and Equity Section

Note: The backend combines liabilities and equity into a single “liabilities” object in the response, but conceptually these are separate categories. Liabilities:

Line Item	Account Role	Description
Organization User Savings	SAVINGS	Total member savings balances
Borrower Surplus	BORROWER_SURPLUS_LIABILITY	Overpayments from borrowers
Additional Liabilities	Custom liability roles	Non-system liability accounts

Equity:

Line Item	Account Role	Description
Opening Equity	OPENING_EQUITY	Initial capital when starting organization
Retained Earnings	RETAINED_EARNINGS	Accumulated profits from prior periods
Current Period Net Income	Calculated	Income - Expenses for current open period
Reserves	RESERVE_ALLOCATION	Designated reserves (array of individual reserves)
Other Equity	OTHER_EQUITY	Miscellaneous equity accounts
Additional Equity	Custom equity roles	Non-system equity accounts

Total Liabilities + Equity: Sum of all liability and equity line items. Must equal Total Assets.

Example Balance Sheet

As of June 30, 2026

ASSETS

Current Assets:

Cash and Bank                     5,000,000 RWF
Loans Receivable                 15,000,000 RWF
Interest Receivable                 500,000 RWF
Penalty Receivable                   50,000 RWF
                                 -------------
Total Current Assets             20,550,000 RWF

Fixed Assets:

Physical Assets                   3,000,000 RWF
  - Cash Purchase                 2,500,000 RWF
  - Collateral                      300,000 RWF
  - Gift                            200,000 RWF
                                 -------------
Total Fixed Assets                3,000,000 RWF

TOTAL ASSETS 23,550,000 RWF

LIABILITIES

Organization User Savings        18,000,000 RWF
Borrower Surplus                     50,000 RWF
                                 -------------
Total Liabilities                18,050,000 RWF

EQUITY

Opening Equity                    1,000,000 RWF
Retained Earnings                 3,000,000 RWF
Current Period Net Income           500,000 RWF

Reserves:
  Emergency Fund                    800,000 RWF
  Loan Loss Reserve                 200,000 RWF
                                 -------------
Total Reserves                    1,000,000 RWF

Other Equity                              0 RWF
                                 -------------
Total Equity                      5,500,000 RWF

TOTALS

TOTAL LIABILITIES + EQUITY       23,550,000 RWF

Assets                           23,550,000 RWF
Liabilities + Equity             23,550,000 RWF
                                 =============
✓ BALANCED

Understanding Current Period Net Income

Current Period Net Income represents the profit or loss from the current open accounting period. Calculation:

Current Period Net Income = Total Income - Total Expenses

Why it appears on the Balance Sheet: When an accounting period is open (not yet closed):

Income and Expense accounts have non-zero balances
These balances represent current period activity
Net Income is calculated and shown on the balance sheet as part of equity

When an accounting period is closed:

Income and Expense accounts are zeroed out
Net Income is transferred to Retained Earnings
Balance sheet shows the transfer in Retained Earnings

Example: Open period (June 2026):

Income accounts total:     2,500,000 RWF
Expense accounts total:    2,000,000 RWF
Current Period Net Income:   500,000 RWF (shows on balance sheet)

After period close:

Income accounts total:             0 RWF (reset)
Expense accounts total:            0 RWF (reset)
Retained Earnings: +500,000 RWF (increased by net income)
Current Period Net Income:         0 RWF (transferred to retained earnings)

Key Financial Metrics

Net Worth (Total Equity)

Net Worth = Total Assets - Total Liabilities

Interpretation:

Positive net worth: Organization is solvent (assets > liabilities)
Negative net worth: Organization is insolvent (liabilities > assets)
Growing net worth: Organization is profitable and healthy

Example:

Total Assets:       23,550,000 RWF
Total Liabilities: -18,050,000 RWF
                   -------------
Net Worth:           5,500,000 RWF ✓ Positive (healthy)

Loan Portfolio

Loan Portfolio = Loans Receivable + Interest Receivable + Penalty Receivable

Interpretation:

Measures total amount owed by borrowers
Indicates lending activity
Major asset for most tontines

Example:

Loans Receivable:    15,000,000 RWF
Interest Receivable:    500,000 RWF
Penalty Receivable:      50,000 RWF
                    -------------
Loan Portfolio:      15,550,000 RWF

Member Deposits

Member Deposits = Organization User Savings

Interpretation:

Total savings members have deposited
Primary liability for most tontines
Source of funds for lending

Example:

Organization User Savings: 18,000,000 RWF

Liquidity Ratio

Liquidity Ratio = Cash and Bank / Organization User Savings

Interpretation:

Measures ability to meet withdrawal demands
Healthy ratio: 10% - 30%
Too low: Risk of liquidity crisis
Too high: Underutilized funds (not lending enough)

Example:

Cash and Bank:              5,000,000 RWF
Organization User Savings: 18,000,000 RWF

Liquidity Ratio: 5,000,000 / 18,000,000 = 27.8% ✓ Healthy

Loan-to-Savings Ratio

Loan-to-Savings Ratio = Loans Receivable / Organization User Savings

Interpretation:

Measures lending aggressiveness
Healthy ratio: 0.6 - 1.2 (60% - 120%)
Too low: Underutilizing member deposits
Too high: Over-leveraged (risky)

Example:

Loans Receivable:          15,000,000 RWF
Organization User Savings: 18,000,000 RWF

Loan-to-Savings: 15,000,000 / 18,000,000 = 83.3% ✓ Healthy

Analyzing the Balance Sheet

Healthy Indicators

✅ Positive equity (Total Assets > Total Liabilities)

Organization is solvent
Can cover all obligations

✅ Adequate liquidity (Cash 10-30% of member savings)

Can meet withdrawal demands
Not holding excessive idle cash

✅ Balanced lending (Loans 60-120% of member savings)

Utilizing deposits effectively
Not over-leveraged

✅ Growing reserves

Building safety cushion
Preparing for losses or emergencies

✅ Low or zero borrower surplus

Accurate payment tracking
Minimal overpayments

✅ Growing retained earnings

Profitable operations
Building long-term value

Warning Signs

⚠️ Negative equity (Liabilities > Assets)

Organization is insolvent
Cannot cover obligations
Action: Reduce lending, increase reserves, improve profitability

⚠️ Very low cash (Cash under 5% of member savings)

Liquidity crisis risk
Cannot meet withdrawals
Action: Reduce new loans, accelerate collections

⚠️ Over-leveraged (Loans over 150% of member savings)

Excessive lending relative to deposits
High risk if defaults occur
Action: Slow new lending, increase member savings

⚠️ Declining net worth

Operating losses
Equity eroding
Action: Review expenses, improve loan recovery, increase income

⚠️ Large borrower surplus

Payment tracking issues
Overpayments not allocated
Action: Reconcile borrower accounts, apply surplus correctly

⚠️ No reserves

No cushion for losses
Risky in case of defaults
Action: Allocate portion of profits to reserves

Comparative Balance Sheet

Analyze trends by comparing periods:

Item	Dec 2025	Jun 2026	Change	% Change
ASSETS
Cash and Bank	3,000,000	5,000,000	+2,000,000	+67%
Loans Receivable	12,000,000	15,000,000	+3,000,000	+25%
Physical Assets	2,000,000	3,000,000	+1,000,000	+50%
Total Assets	17,000,000	23,550,000	+6,550,000	+39%

LIABILITIES
Member Savings	14,000,000	18,000,000	+4,000,000	+29%
Total Liabilities	14,050,000	18,050,000	+4,000,000	+28%

EQUITY
Retained Earnings	2,500,000	3,000,000	+500,000	+20%
Reserves	450,000	1,000,000	+550,000	+122%
Total Equity	2,950,000	5,500,000	+2,550,000	+86%

Analysis:

✅ Assets grew 39% (strong growth)
✅ Liabilities grew 28% (member deposits increasing)
✅ Equity grew 86% (very strong profitability)
✅ Reserves more than doubled (building safety cushion)
✅ Loan portfolio expanded 25% (good lending activity)
✅ Cash position improved significantly (+67%)

Conclusion: Healthy growth with improving financial position.

Using the Balance Sheet

Monthly Board Reports

Package for board meetings:

GET /reports/balance-sheet?asOfDate=2026-06-30
GET /reports/profit-loss?startDate=2026-06-01&endDate=2026-06-30

Present:

Balance sheet showing financial position at month-end
Profit & loss showing monthly performance
Key metrics (liquidity ratio, loan-to-savings ratio)
Trends vs prior month

Year-End Closing

After closing accounting period:

GET /reports/balance-sheet?asOfDate=2025-12-31

Verify:

Current Period Net Income = 0 (transferred to Retained Earnings)
Retained Earnings increased by net income
All income/expense accounts zeroed out
Balance sheet still balances

Audit Preparation

For external auditors:

GET /reports/balance-sheet?asOfDate=2025-12-31

Provide:

Year-end balance sheet
Supporting schedules for major accounts
Reconciliations (cash, loans, member savings)
Reserve policies and calculations

Regulatory Reporting

For government filings:

GET /reports/balance-sheet?asOfDate=2025-12-31

Submit:

Official balance sheet with organization letterhead
Signed by authorized officers
Include notes explaining accounting policies
Attach auditor’s report if required

Physical Assets Breakdown

Physical assets are categorized by acquisition method:

Cash Purchase

Assets purchased with organization funds:

Office furniture: 1,500,000 RWF
Computer equipment: 800,000 RWF
Safe: 200,000 RWF
Total: 2,500,000 RWF

Journal entry:

DEBIT:  Fixed Asset (Cash Purchase)  2,500,000 RWF
CREDIT: Cash                          2,500,000 RWF

Collateral

Assets acquired from defaulted loans:

Motorcycle (loan default): 300,000 RWF
Total: 300,000 RWF

Journal entry:

DEBIT:  Fixed Asset (Collateral)   300,000 RWF
CREDIT: Loan Receivable             300,000 RWF

Gift

Donated assets:

Donated computer: 200,000 RWF
Total: 200,000 RWF

Journal entry:

DEBIT:  Fixed Asset (Gift)    200,000 RWF
CREDIT: Other Income           200,000 RWF

Reserve Allocations

Reserves are designated equity set aside for specific purposes: Example reserves:

Emergency Fund:       800,000 RWF (for unexpected expenses)
Loan Loss Reserve:    200,000 RWF (for bad debt write-offs)
Building Fund:              0 RWF (savings for future building)
Total Reserves:     1,000,000 RWF

Each reserve appears as a separate line item with its name and amount. Purpose:

✅ Earmark funds for specific uses
✅ Build safety cushion
✅ Prepare for known future expenses
✅ Demonstrate prudent financial management

Learn more about reserves →

Best Practices

Balance sheet best practices:Timing:

✅ Generate at month-end after all transactions posted
✅ Review before closing accounting period
✅ Compare to prior periods for trend analysis

Accuracy:

✅ Verify all transactions posted before generating
✅ Ensure no draft entries pending
✅ Reconcile major accounts (cash, loans, savings)
✅ Verify isBalanced = true in response

Analysis:

✅ Calculate key ratios (liquidity, loan-to-savings)
✅ Compare to prior periods
✅ Investigate unusual changes
✅ Review reserve adequacy

Distribution:

✅ Board members (monthly)
✅ Management (monthly)
✅ Members (annually with explanation)
✅ Auditors (annually)
✅ Regulators (as required)

Documentation:

✅ Keep copies of all distributed balance sheets
✅ Archive year-end balance sheets permanently
✅ Document unusual items or adjustments
✅ Maintain supporting schedules

Exporting

Export options (if supported by UI): PDF:

✅ Official distribution to board, members, auditors
✅ Professional formatting with organization header
✅ Signatures and date

Excel:

✅ Analysis and custom formatting
✅ Ratio calculations
✅ Comparative period analysis
✅ Charts and visualizations

CSV:

✅ Import to accounting software
✅ Data processing
✅ Integration with other systems

Profit & Loss

Income and expenses for the period

General Ledger

Accounting foundation for balance sheet

Understanding Double-Entry

Accounting principles behind reports

Reserves

Learn about reserve allocations

Accounting Periods

Period closing and net income transfers

​What is a Balance Sheet?

​API Endpoint

​Report Structure

​Assets Section

​Liabilities and Equity Section

​Example Balance Sheet

​ASSETS

​LIABILITIES

​EQUITY

​TOTALS

​Understanding Current Period Net Income

​Key Financial Metrics

​Net Worth (Total Equity)

​Loan Portfolio

​Member Deposits

​Liquidity Ratio

​Loan-to-Savings Ratio

​Analyzing the Balance Sheet

​Healthy Indicators

​Warning Signs

​Comparative Balance Sheet

​Using the Balance Sheet

​Monthly Board Reports

​Year-End Closing

​Audit Preparation

​Regulatory Reporting

​Physical Assets Breakdown

​Cash Purchase

​Collateral

​Gift

​Reserve Allocations

​Best Practices

​Exporting

​Related Topics

Profit & Loss

General Ledger

Understanding Double-Entry

Reserves

Accounting Periods

What is a Balance Sheet?

API Endpoint

Report Structure

Assets Section

Liabilities and Equity Section

Example Balance Sheet

ASSETS

LIABILITIES

EQUITY

TOTALS

Understanding Current Period Net Income

Key Financial Metrics

Net Worth (Total Equity)

Loan Portfolio

Member Deposits

Liquidity Ratio

Loan-to-Savings Ratio

Analyzing the Balance Sheet

Healthy Indicators

Warning Signs

Comparative Balance Sheet

Using the Balance Sheet

Monthly Board Reports

Year-End Closing

Audit Preparation

Regulatory Reporting

Physical Assets Breakdown

Cash Purchase

Collateral

Gift

Reserve Allocations

Best Practices

Exporting

Related Topics