Hi, I have a bit of an issue with balancing my balance sheet.

My company is a cloud based company where I work from home and I hire independent contractors. I have MAYBE $1,500 in physical assets and total overhead is around $800/month including my tax defined work area. I have no debt or tax debt. Problem is the cash on hand, outstanding accounts receivable and expected revenue (on 36 month contracts) substantially offsets my debts. Even if I were to take away the 36 month revenue contracts and it doesn't come close to my debt side of my balance sheet. I've talked with several professional accountants and it seems nobody has encountered this situation before. I am trying to prep my company to be sold soon and I am not sure how to get around this. I have been told that this is considered a "red flag" because every company operates with debt that equals assets. I need some help here!

Also, we don't have any marketing expenses or anything. Also, I don't always hire contractors and when I do it's per job which they get paid right away.

The basic equation is that assets minus debt equals equity, so equity balances out your balance sheet. The idea that is a misnomer, a false understanding which might be popular outside of accounting theory. Your not so professional advisers just fail to understand the essential equation that a business doesn't need debt if it has sufficient assets. It is your choice whether you leverage your business with debt or not