Balance Sheet Template

Every small business needs a clear picture of its financial health. Having a balance sheet template handy can help you keep track of your business's assets, liabilities, and equity in one place, giving you the organized insights you need to make informed decisions about your immediate and long-term financial future.

A balance sheet allows you to see:

• How much your business owns
• How much your business owes to others
• How much is left for you, the owner

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If you ever want to bring on investors, or sell to someone else, you’ll need a balance sheet ready.

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What exactly is a balance sheet?

You can think of a balance sheet as a financial snapshot of what your business owns (assets), owes (liabilities), and your equity at any given time. It’s also one of three integral components of your business’s financial statements.

Balance sheets are straightforward in that they follow this fundamental accounting equation: 

Assets = Liabilities + Equity

Consider it a powerful financial tool that will enable you to better understand your business’s financial position and track its growth over time. By maintaining an accurate balance sheet, you can make better-informed decisions regarding your business's future growth and easily communicate your financial standing to any stakeholders involved.

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The 3 basic parts of a balance sheet

Understanding the three main components of a balance sheet is essential for maintaining accurate financial records and making those informed business decisions.

Here’s the breakdown:

1. Assets

Assets are everything your company owns that has monetary value, and they’re typically categorized as current or fixed. 

• Your current assets can be converted to cash within one year and include cash and cash equivalents, accounts receivable, inventory, and prepaid expenses. 
• Your fixed assets are long-term assets such as equipment, buildings, vehicles, and property. These non-current assets typically serve as the backbone of your business operations and represent significant investments in your company's future.

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Your total assets (current + fixed) represent the full value of what your business owns, from the cash in your bank account to the equipment in your office. Properly categorizing and tracking your assets ensures you have an accurate picture of your business's resources and helps you make informed decisions about future investments.

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2. Liabilities

Liabilities represent everything your business owes to others, such as vendors. These are typically categorized as current and long-term liabilities.

• Your current liabilities are due within one year and include accounts payable, short-term loans, credit card debt, and payroll liabilities. 
• Your long-term liabilities extend beyond a year and can include mortgages, long-term loans, and equipment leases.

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Understanding your liabilities is crucial for managing your business's debt obligations and planning future payments. By tracking your current and long-term liabilities, you can better manage your cash flow and ensure your business maintains healthy financial relationships with creditors and suppliers.

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3. Equity

Equity represents your stake in the business, including owner's equity, retained earnings, and contributed capital. You can think of equity as what would be left over if you sold all your assets and paid off all your liabilities. This figure is crucial for understanding your business's net worth and tracking its growth over time.

For small businesses, equity often reflects your initial investment plus any additional capital contributions and retained earnings from profitable operations. Understanding your equity position can help you evaluate your business's financial health and make decisions about reinvestment or distribution of profits down the road.

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How can balance sheets help small businesses?

Tracking business growth

Balance sheets serve as a fundamental tool for understanding and improving your business's financial health. By providing a clear snapshot of your assets, liabilities, and equity, they enable you to make data-driven decisions about your company's future. Updating your balance sheet on a regular basis—say monthly or quarterly—helps you track your business's growth over time and identify trends that might affect your bottom line.

Investment opportunities

When seeking funding or investment opportunities, a well-maintained balance sheet demonstrates your business's financial responsibility and stability to potential lenders or investors. It provides concrete evidence of your company's financial position and helps build trust with financial partners.

Monitor cash flow

Regular balance sheet maintenance and analysis allow you to spot potential financial discrepancies before they become serious issues. By monitoring changes in your assets and liabilities, you can identify cash flow challenges early and take corrective action before they impact your operations.

Easier tax prep

Tax preparation becomes significantly easier with an up-to-date balance sheet. Having this financial information readily available saves time during tax season and helps ensure compliance with reporting and tax filing requirements.

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How to use Bench Accounting's balance sheet template

Our balance sheet template simplifies how you track your business's financial position. Start by listing all your assets in the appropriate categories, then document all of your liabilities, and calculate your total equity. From there, all you have to do is verify that your total assets are equal to your total liabilities plus current equity.

Download the Free Balance Sheet Template

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Dos and don’ts when using our balance sheet

Do:

• Keep your numbers straight. Your balance sheet will only be as good as your bookkeeping. If you need a primer, check out our Bookkeeping Basics guide.
• Update your balance sheet regularly (monthly or quarterly).
• Include all relevant assets, liabilities, and equity for your specific business.
• Keep detailed records of all transactions.
• The categories in the template are just a starter. Make sure you include every asset, liability, and equity relevant to your business.
• Consider working with a professional bookkeeper when you no longer have time (or the confidence) to do your own accounting (Bench can help you with that and provide you with monthly balance sheets and easy-to-read financial reports).

Don’t:

• Forget to include all assets and liabilities, no matter how minor—otherwise, you’ll end up with an inaccurate picture of your business’s financial health
• Mix personal and business finances
• Forget to update your balance sheet regularly
• Incorrectly categorize items
• Confuse this balance sheet for an income statement sheet
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Get your free balance sheet template today

Are you ready to take control of your business's financial future? Download our free balance sheet template today. All you have to do is fill in your name and email address to get instant access to Bench Accounting's balance sheet template download. 

Need more guidance?

• Check out our Balance Sheets, Explained resource page for in-depth information about how balance sheets work and how to use them effectively for your small business.
• You can also check out our Free Course on Understanding Financial Statements and walk away with a solid grasp on using financial statements to analyze your business performance (and how the professionals at Bench Accounting can help).

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Whether you're just starting out or looking to improve your business’s financial management, our template and resources will help you build stronger and more financially sound bookkeeping practices.