Create and Use a Balance Sheet for Your Small Business
Square cannot provide advice on tax issues. This article is for educational purposes and does not constitute legal or tax advice. For specific advice applicable to your business, please contact a professional.
Let’s dig a little bit deeper into the balance sheet. A balance sheet is a statement of a business’s assets, liabilities, and owners’ equity as of that date. It can be made any time, but they are usually done for set periods of time such as a quarter or a year. Split into two columns, one side of the sheet lists assets while the other lists liabilities and owners’ equity. Your business’s total liabilities and owners’ equity equals the assets.
Using a balance sheet can give you a glimpse at how your company is doing financially, but there are several accounting reports you should consider looking at to get a more holistic view of your business’s finances. Think about using a profit and loss statement, cash flow forecast statement, and a balance sheet together.
We’ve partnered with our friends at Bench to bring you this balance sheet template.
What you'll gain:
Manage your cash flow
A glance at your company’s financial health. While you may have many more lines you can add into this flexible template, try to compress them into the lines provided. This will give you a quick and clear look at your business’s balance sheet.
A glossary of terms
A short list of defined terms from owners’ equity to fixed assets. Check the second tab of the template to guide you as you fill out your balance sheet. By understanding how assets, liabilities, and owners’ equity are defined, you can assess where to log things like wages or taxes on your balance sheet.
Evaluate your business’s needs
Pair this balance sheet with a cash flow statement template and a profit and loss template to see a more complete picture of your business’s finances. Using all three accounting reports together can give you deeper insights into your business, informing possible future decisions related to your business.