Reports That Tell the Story

It was the last Friday of September. Bisht Ji arrived at the office with a serious expression. "Sharma Sir, I need to know — how is my business doing? Am I making money? Who owes me money? How much do I owe? I need everything."

Sharma Sir smiled. "Meera, this is the moment everything comes together. For the past few weeks, you have been entering transactions — sales, purchases, receipts, payments. Now we ask the big question: what do all those numbers mean?"

He turned to Bisht Ji. "Give us thirty minutes. Meera will run every report you need."

Meera opened ERPLite and clicked on Reports. She had been waiting for this.

Why Reports Matter

Let us be honest. Nobody becomes an accountant because they enjoy entering vouchers all day. The vouchers are the ingredients. The reports are the dish you serve.

Reports answer the questions that business owners, investors, banks, and the tax department ask:

"Think of it like a medical report," Sharma Sir told Meera. "The doctor does not just check your temperature. He checks your blood pressure, your blood sugar, your heart rate, your cholesterol — all of them together tell the story of your health. These reports together tell the story of a business's health."

Let us run each report for Bisht Traders and understand what it shows.

1. Trial Balance — All Accounts at a Glance

Meera clicked Reports → Trial Balance.

She selected the period: 1st April 2025 to 30th September 2025 (first half of the financial year).

The Trial Balance appeared. It listed every account that had activity during this period, with its closing balance.

Bisht Traders — Trial Balance as on 30th September 2025

"The totals match!" Meera said, excited.

"That is the whole point of a Trial Balance," Sharma Sir said. "If the debit total equals the credit total, it means all your entries follow the double-entry rule. Every debit had a corresponding credit. The books are in balance."

How to Read a Trial Balance

The Trial Balance is like a health checkup summary. Here is what Sharma Sir pointed out:

1. Cash position: Cash in Hand (Rs. 45,000) + Bank (Rs. 3,82,000) = Rs. 4,27,000. The business has money available.

2. Receivables: Rs. 1,25,500. Customers owe this much. Is it too high? We need to check the Aged Receivables report.

3. Payables: Rs. 95,000. We owe suppliers. We need to check when these payments are due.

4. Sales vs. Purchases: Sales = Rs. 12,80,000 vs. Purchases = Rs. 7,20,000. Gross margin = Rs. 5,60,000. That looks healthy.

5. GST Check: Input Credit (IGST Rs. 18,200 + CGST Rs. 8,400 + SGST Rs. 8,400 = Rs. 35,000) vs. GST Payable (CGST Rs. 22,750 + SGST Rs. 22,750 + IGST Rs. 12,500 = Rs. 58,000). Net GST to pay = Rs. 58,000 - Rs. 35,000 = Rs. 23,000. This will go into the GSTR-3B return.

"If the totals don't match," Negi Bhaiya said, "something is wrong. Maybe an entry has only a debit and no credit. Maybe there is a calculation error. In ERPLite, this rarely happens because the software forces balanced entries. But if you import data from another system, always check the Trial Balance first."

2. Profit & Loss Statement — Are We Making Money?

Meera clicked Reports → Profit & Loss Statement.

Period: 1st April 2025 to 30th September 2025

Bisht Traders — Profit & Loss Statement (Apr-Sep 2025)

"Three lakh fifty-five thousand profit in six months," Bisht Ji said, nodding. "Not bad."

How to Read a P&L Statement

"The P&L tells you the story of a period," Sharma Sir explained. "It says — during these six months, how much did you earn and how much did you spend? The difference is your profit or loss."

Key things to look at:

"If your net profit is negative," Negi Bhaiya said, "the business is losing money. If it is very low — say 2-3% — the business is barely surviving. Bisht Ji's 27% is quite good."

"But this is before income tax," Sharma Sir cautioned. "After tax, the actual profit will be lower. We will deal with that later."

3. Balance Sheet — What Do We Own and Owe?

Meera clicked Reports → Balance Sheet.

As on: 30th September 2025

Bisht Traders — Balance Sheet as on 30th September 2025

"Wait," Meera frowned. She checked her numbers. "Total Assets is Rs. 13,57,500 but Liabilities plus Equity is Rs. 13,36,500. They don't match by Rs. 21,000."

"Good catch," Sharma Sir said. "That means we probably have some account that is not classified correctly, or there is a rounding difference in the inventory valuation. This is why we check the Balance Sheet — it tells you if something is off."

In practice, ERPLite would show a balancing figure or highlight the discrepancy. The accountant then investigates and corrects it.

How to Read a Balance Sheet

The Balance Sheet is a snapshot — it shows the financial position at one specific moment in time. Unlike the P&L, which covers a period, the Balance Sheet is as on a particular date.

The golden rule: Assets = Liabilities + Owner's Equity

This is the accounting equation we learned in Part 1. The Balance Sheet is the ultimate test of this equation.

"A healthy business," Sharma Sir said, "has more assets than liabilities. The difference is the owner's equity — what the owner truly owns. Bisht Ji's equity is Rs. 11,33,340 against total assets of Rs. 13,57,500. That means only Rs. 2,03,160 is owed to others. That is a strong position."

4. Cash Flow Statement — Where Did the Cash Go?

Meera clicked Reports → Cash Flow Statement.

Period: 1st April 2025 to 30th September 2025

Bisht Traders — Cash Flow Statement (Apr-Sep 2025)

How to Read a Cash Flow Statement

"This report confuses many people," Sharma Sir said. "Let me make it simple."

The Cash Flow Statement answers one question: Where did the cash come from and where did it go?

It has three sections:

1. Operating Activities: Cash from daily business operations.

Bisht Ji made a profit of Rs. 3,55,340 on paper. But his operating cash flow is negative (Rs. -21,800). Why? Because a lot of cash is locked up in inventory (Rs. 4,00,000 of spices sitting in the warehouse) and receivables (Rs. 1,25,500 owed by customers). Profit on paper does not always mean cash in hand.

"This is very important," Sharma Sir said. "Many profitable businesses run out of cash because their money is stuck in inventory and unpaid invoices. The P&L says profit, but the bank account says empty. The Cash Flow Statement reveals this problem."

2. Investing Activities: Cash spent on long-term assets.

Bisht Ji bought a delivery van for Rs. 4,00,000. This is an investment — it will be used for years.

3. Financing Activities: Cash from owners or lenders.

Bisht Ji put in Rs. 5,00,000 of his own capital and had Rs. 2,78,000 of retained earnings from previous years.

5. Day Book — What Happened Today?

Meera clicked Reports → Day Book.

She selected the date: 15-07-2025.

The Day Book showed every transaction recorded on that date:

Day Book — 15th July 2025

"The Day Book is your daily diary," Negi Bhaiya said. "If Bisht Ji calls and asks 'What entries were made today?', you open the Day Book and read them off. Everything is listed in the order it was entered."

When to Use the Day Book

• Daily review: At the end of each day, review the Day Book to make sure nothing was missed.
• Error checking: If a number looks wrong in the Trial Balance, go to the Day Book for that date and check each entry.
• Audit: When the auditor asks "Show me all transactions on 15th July," you open the Day Book.

6. Sales Register — All Sales with GST Details

Meera clicked Reports → Sales Register.

Period: July 2025

Sales Register — July 2025

Why the Sales Register Matters

The Sales Register is critical for GST filing. When you file GSTR-1 (the monthly/quarterly sales return), you need to report every invoice with:

• Customer name and GSTIN
• Taxable value
• GST breakup (CGST, SGST, or IGST)
• HSN code

ERPLite's Sales Register gives you all of this in one place. You can even export it as an Excel file and upload it to the GST portal.

"This report is Meera's best friend during GST filing," Negi Bhaiya said. "Without it, you would have to go through every invoice one by one. With it, you have everything summarized."

Notice the fourth invoice — Delhi Restaurant. Since they are in Delhi (state code 07) and Bisht Traders is in Uttarakhand (state code 05), the GST is IGST, not CGST + SGST. The Sales Register clearly shows this difference.

7. Purchase Register — All Purchases with GST Details

Meera clicked Reports → Purchase Register.

Period: July 2025

Purchase Register — July 2025

Why the Purchase Register Matters

The Purchase Register serves two purposes:

1. GST Input Credit Claim: The GST you pay on purchases can be claimed as Input Tax Credit (ITC). The Purchase Register summarizes all the GST you have paid — CGST, SGST, and IGST. When you file GSTR-3B, you report this total.

2. GSTR-2A/2B Matching: The GST portal has a system called GSTR-2A/2B that shows what your vendors have reported in their GSTR-1. You need to match your Purchase Register with the GSTR-2A/2B. If a vendor forgot to report a sale to you, you might not get the ITC for that purchase. The Purchase Register helps you identify mismatches.

8. Aged Receivables — Who Owes Us Money?

This is one of the most important reports for any business. Meera clicked Reports → Aged Receivables.

As on: 30th September 2025

Aged Receivables — Bisht Traders as on 30th September 2025

How to Read Aged Receivables

The report groups outstanding amounts into aging buckets — how old the unpaid invoice is.

"Look at this column by column," Sharma Sir said to Bisht Ji.

Current (0-30 days): Rs. 26,344.50. These invoices are recent. No cause for concern yet. The payment terms haven't expired.

31-60 days: Rs. 13,125. Almora Kitchen Supplies is slightly overdue. Follow up with a polite reminder.

61-90 days: Rs. 47,250. Kumaon Hotel Group owes a large amount and it is now 2-3 months old. This is worrying. Bisht Ji needs to call them.

Over 90 days: Rs. 38,781. Hill View Cafe has not paid for over three months. This is a red flag. There might be a dispute, or the cafe might be having financial difficulties.

"The older the outstanding, the harder it is to collect," Sharma Sir said. "An invoice that is 30 days old — you will probably get the money. An invoice that is 90 days old — maybe. Over 180 days? You might have to write it off as a bad debt."

Action items based on this report:

"Run this report every week," Negi Bhaiya said. "Don't let receivables grow old. The longer you wait, the harder it gets."

9. Aged Payables — Who Do We Owe?

Meera clicked Reports → Aged Payables.

As on: 30th September 2025

Aged Payables — Bisht Traders as on 30th September 2025

How to Read Aged Payables

This report is the mirror of Aged Receivables — but from the other side. Instead of "who owes us," it shows "who do we owe."

"The key question here is different," Sharma Sir said. "With receivables, you worry about old debts. With payables, you worry about due dates. If Bisht Ji doesn't pay a vendor on time, two things happen: the vendor might stop supplying goods, and the vendor might charge interest on the overdue amount."

Bisht Ji's situation looks good: Most payables are current (within 30 days). Rajasthan Masala Co. is at 31-60 days — that is within their payment terms of 30 days (barely overdue). No payables are older than 60 days.

"Pay on time," Bisht Ji said. "That is my rule. A good reputation with suppliers is more valuable than anything."

Bringing It All Together — The Dashboard View

After running all the reports, Meera went back to the ERPLite dashboard. She now understood what every number on the dashboard meant.

"When you first saw this dashboard," Sharma Sir said, "these were just numbers. Now each number has a story behind it. You know which customer owes you. You know which vendor you need to pay. You know if the business is profitable. You know where the cash is. That is what accounting is all about — numbers that tell stories."

When to Run Each Report

Here is a practical guide on when you should run each report:

"In a CA office like ours," Negi Bhaiya said, "we run the Trial Balance monthly for every client. P&L and Balance Sheet are prepared quarterly for bigger clients and annually for smaller ones. Sales and Purchase Registers are run monthly for GST filing. Aged Receivables and Payables are the owner's responsibility — they should check it every week."

Quick Recap

• Trial Balance — lists all accounts with balances; debits must equal credits; first check for accuracy
• Profit & Loss Statement — shows income minus expenses for a period; tells you if the business is making or losing money
• Balance Sheet — shows assets, liabilities, and equity at a point in time; Assets = Liabilities + Equity
• Cash Flow Statement — shows where cash came from and where it went; a profitable business can still run out of cash
• Day Book — shows every transaction on a specific date; your daily diary
• Sales Register — all sales invoices with GST details; essential for GSTR-1 filing
• Purchase Register — all purchase bills with GST details; essential for ITC claims and GSTR-3B
• Aged Receivables — who owes you money and for how long; older = harder to collect
• Aged Payables — who you owe money to and for how long; pay on time to maintain relationships
• ERPLite generates all reports automatically from the transactions you enter — no manual calculations needed
• Run reports regularly — daily (Day Book), weekly (Receivables/Payables), monthly (TB, Registers), quarterly (P&L, BS, Cash Flow)

Practice Exercise — Try This Yourself

Here is a simplified Trial Balance for Rawat General Store. Some numbers are missing. Fill them in.

Rawat General Store — Trial Balance as on 30th September 2025

Tasks:

1. If the totals must be equal, and Salary expense is Rs. 24,000, what must Retained Earnings be? (Hint: Add up all debits, add up all known credits, and find the difference.)

2. From the Trial Balance above, calculate:

   • Gross Profit (Sales minus Purchases)
   • Total Expenses (Rent + Electricity + Salary)
   • Net Profit (Gross Profit minus Total Expenses)

3. Prepare a simple P&L statement for Rawat General Store using the numbers above.

4. Looking at the Aged Receivables below, which customer should Rawat Aunty call first?

5. What is the total of all receivables in the aging report? Does it match the Trade Receivables in the Trial Balance?

Fun Fact

The first known Balance Sheet was prepared in 1868 by a British railway company. But the concept goes back much further. In 1494, an Italian friar named Luca Pacioli published a book describing the double-entry system — debits and credits, journals and ledgers, trial balances and balance sheets. He did not invent it — Venetian merchants had been using it for centuries. But he wrote it down properly for the first time. Pacioli is called the "Father of Accounting." His book was so influential that every accounting student in the world today — including Meera in Haldwani — is still following the system he described 530 years ago. When Meera runs a Trial Balance in ERPLite and sees debits equal credits, she is checking the same rule that Pacioli wrote about in 1494. Some ideas are truly timeless.