Accounting Balance Sheet Template for Small Business

Quick Answer: An accounting balance sheet template lists what the business owns (assets), what it owes (liabilities) and the owner's stake (equity) on one date, and it must satisfy Assets = Liabilities + Equity. In Excel, build three labelled sections, take each balance from its source document (bank and card statements, loan statements, receivables, inventory count), and add one check cell that shows zero when the sheet balances.

A balance sheet is a snapshot of the business on a single day, usually the last day of a month or year. It answers a lender's first question (what do you own and owe?) and it is the report that exposes bookkeeping errors fastest, because a mistake anywhere shows up as a difference between the two sides.

The three sections and their order

Small business balance sheets follow a conventional layout. Keep it, because anyone reading your template, from a banker to a tax preparer, will look for lines in these places.

Assets, most liquid first:

• Cash: each bank account on its own row
• Accounts receivable: invoices sent and not yet paid
• Inventory: goods on hand at cost
• Prepaid expenses: insurance or rent paid ahead
• Equipment, vehicles, furniture at cost, then accumulated depreciation as a negative row beneath

Liabilities, soonest due first:

• Accounts payable: supplier bills received and unpaid
• Credit cards: each card's balance owed
• Sales tax and payroll taxes collected but not yet remitted
• Current portion of loans (due within twelve months)
• Long-term portion of loans

Equity:

• Owner's contributions (or common stock for a corporation)
• Owner's draws or distributions, as a negative
• Retained earnings: accumulated profit from prior years
• Current year net income

Group current assets and current liabilities with subtotals. Lenders often compute a current ratio from them (current assets divided by current liabilities), so having both subtotals visible saves them a step.

Where does each number come from?

A template is only as good as its inputs. This is the column most templates leave out, and it is the one that makes a balance sheet defensible.

Put this source in a column beside each amount, so you can see at a glance which numbers came from documents and which are estimates.

If your bank and card statements are PDFs, a converter such as QuickBankConvert reads the opening and closing balances along with the transactions, which is handy when you are pulling year-end figures for several accounts at once. You still reconcile; the statement balance is the starting point, not the final cash figure. Account reconciliation template in Excel shows the reconciliation layout for one account.

Building it in Excel

1. Column A: line names. Column B: amount. Column C: source. Column D: notes.
2. Use positive numbers for every asset, liability and equity line, except contra lines (accumulated depreciation, owner's draws), which are negative.
3. Subtotals with SUM over each group: Current assets, Fixed assets net, Total assets; Current liabilities, Long-term liabilities, Total liabilities; Total equity.
4. A final line, Total liabilities and equity, as =TotalLiabilities+TotalEquity.
5. The check cell: =ROUND(TotalAssets-TotalLiabEquity,2). Give it a conditional format that turns it red when it is not zero.
6. Add a second amount column for the prior period so each line shows this year and last year side by side, with a change column between them.

Keep the current year net income line linked to your profit and loss sheet if you have one in the same workbook. If your income and expenses live in a small business spreadsheet for income and expenses, the year-to-date profit there is exactly the figure this row needs.

A filled example

A small landscaping company, December 31:

The check cell shows $1,000. The sheet does not balance, which is the point of the next section.

Why won't my balance sheet balance?

In the example, the owner traced the $1,000 to a customer deposit for spring work. The cash was sitting in checking, but nothing on the liability side said the business owed that customer a job. Adding a Customer deposits line of $1,000 under liabilities balances the sheet. The usual suspects, in roughly the order to check them:

1. Net income does not match the profit and loss. If profit was computed from a different date range or an older version of the books, equity is off by the difference.
2. A transfer counted twice or once. Money moved from checking to savings appears in both statements; it should change two asset lines and nothing else.
3. Credit card payments booked as expenses. Paying the card reduces cash and the card liability. If it was also recorded as an expense, profit is understated and the sheet is off by the payment.
4. Loan payments not split. Only the principal reduces the loan balance; interest is an expense. Recording the full payment against the loan leaves the loan understated.
5. Owner draws recorded as wages or expenses. For a sole proprietor or partnership, draws reduce equity, not profit.
6. Opening equity never set. A first balance sheet needs opening balances for every account; without them retained earnings is a plug.
7. Sign errors. A liability entered as a negative, or depreciation entered as positive, swings the check by twice the amount.

A difference divisible by nine often points to transposed digits; a difference equal to one line's amount usually points to that line being on the wrong side. For a methodical pass account by account, see how to reconcile a balance sheet.

Is a spreadsheet balance sheet good enough?

For a business with a few accounts, simple loans and no inventory accounting, yes, as long as the numbers come from reconciled sources. The SBA's guidance on managing your finances covers the bookkeeping and reconciliation habits that make any balance sheet trustworthy. The IRS's recordkeeping page is the reminder to keep the underlying statements and invoices, not just the summary.

A spreadsheet becomes the weak point when you need it monthly, have several people entering data, or must produce statements a lender relies on. At that stage accounting software builds the balance sheet from the ledger automatically, and the spreadsheet becomes a review tool. Whatever you use, line names should match your chart of accounts, so the balance sheet, the profit and loss and the tax return all describe the same buckets.

Related guides

• Account reconciliation template in Excel
• How to reconcile a balance sheet
• Chart of accounts for a small business
• Inventory spreadsheet for small business for the count behind the inventory line