Free Small Business Balance Sheet Templates

As the company pays off its AP, it decreases along with an equal amount decrease to the cash account. This account includes the balance of all sales revenue still on credit, net of any allowances for doubtful accounts (which generates a bad debt expense). As companies recover accounts receivables, this account decreases, and cash increases by the same amount. Subtract liabilities from assets to determine your business’s equity. Fill out your balance sheet template to calculate your business equity in minutes. With the balance sheet template Google Sheets provides, you’ll be filling in fields with ease.

The balance sheet is basically a report version of the accounting equation also called the balance sheet equation where assets always equation liabilities plus shareholder’s equity. No balance sheet statement is complete (in my opinion) without an income statement to go along with it. To complete your balance sheet template you’ll need to add in details about the debts and liabilities your company owes. Changes in balance sheet accounts are also used to calculate cash flow in the cash flow statement. For example, a positive change in plant, property, and equipment is equal to capital expenditure minus depreciation expense.

Financial Statements

In order for the band to start up, each member had to come up with $2,500 to pool together and buy equipment. The initial investment made by Bash and the 25% of the cost of updating equipment is what can be counted as Bash’s owner’s equity. They can offer discounts to customers who pay quickly or insist that customers pay a 20% deposit before any work is performed. These steps will reduce the accounts receivable balance and increase cash.

That is, assets are on the left; liabilities and stockholders’ equity are on the right. Plus, find helpful tips for using a small business balance sheet template. Unlike the asset and liability sections, the equity section changes depending on the type of entity.

Download the free balance sheet template

It’s easy to share reports with your business partners, investors, or colleagues. You can even schedule them to be automatically generated and sent daily, weekly, or monthly. Investors, creditors, and internal management use the balance sheet to evaluate how the company is growing, financing its operations, and distributing to its owners. It will also show the if the company is funding its operations with profits or debt. Here is an example of how to prepare the balance sheet from our unadjusted trial balance and financial statements used in the accounting cycle examples for Paul’s Guitar Shop. FreshBooks is an Invoice and accounting software providing solutions like Invoicing, Time tracking, Accounting, Reports, Bookkeeping, and more.

A balance sheet is important because it provides business owners with a snapshot of what they own, the balances they owe, and how much their business is worth. Unfortunately, without further scrutiny into his balance sheet, Joe isn’t able to monitor his overall financial health at any given time. Now that the balance sheet is prepared and the beginning and ending cash balances are calculated, the statement of cash flows can be prepared. A lot of times owners loan money to their companies instead of taking out a traditional bank loan. Investors and creditors want to see this type of debt differentiated from traditional debt that’s owed to third parties, so a third section is often added for owner’s debt.

Insights and Reports

The balance sheet tells you what your business owns and what it owes to others on a specific date. As an example, let’s look at Reliable Plumbing, a commercial plumbing company that generates $12 million in annual sales. As the owner of Reliable Plumbing, Joe’s balance sheet is an important aspect of his business, but managing a growing company requires a lot of Joe’s time.

This account may or may not be lumped together with the above account, Current Debt. While they may seem similar, the current portion of long-term debt is specifically the portion due within this year of a piece of debt that has a maturity of more than one year. For example, if a company takes on a bank loan to be paid off in 5-years, this account will include the portion of that loan due in the next year. There are two other documents that go alongside the balance sheet and complement the general ledger. The balance reflected by a balance sheet is equity—which is assets minus liabilities. Knowing your equity will give you an idea of how your business is doing and how much it is worth.

What are assets on a balance sheet?

The templates are completely free to download and easily customizable. Go a level deeper with us and investigate the potential impacts of climate change on investments like your retirement account. As you can types of contra accounts see, the report form is more conducive to reporting an additional column(s) of amounts. The comparative balance sheet presents multiple columns of amounts, and as a result, the heading will be Balance Sheets.

It breaks down the value of your business from your assets to your liabilities, so that you can make educated and competent decisions about the future of your business. The FreshBooks balance sheet sample will save you time and money on your accounting. Download the template in the format of your choice, and customize it to fit your needs. Download the FreshBooks app on your smartphone or tablet to get started with mobile bookkeeping.

Components of a Balance Sheet

A company is financially stable when the assets are more than the liabilities, and it represents capital. The Balance Sheet is prepared from the Real Accounts and Personal Accounts. Ledger accounts that have not been closed having debit balances are shown on the assets side and those having credit balances are shown on the liabilities side. He does that by using the balance sheet equation and listing not only what every account is, but also what its balance is. On one side of the balance sheet are the assets; on the other side are the liabilities and owner’s equity.

• In this section all the resources (i.e., assets) of the business are listed.
• But mostly, all assets are recorded on the left hand side be it non-current assets (also known as fixed assets), intangible assets, and current assets.
• All of the report templates from FreshBooks are available for download in .xls, .doc, PDF, Google Docs and Google Sheets.
• You can even project future business growth or loss by using a balance sheet forecast template — letting you make the best decisions possible for the future of your company.