Download these 10 Free Balance Sheet Templates in MS Excel format to help you prepare your Balance Sheet.
Being an owner of a small organization or company, you always know what you owe, what you own, and what your current equity is but it’s not possible to know the exact equity figure at any given moment. If someone asks, you can’t just ask them to wait while you do all the calculations in your head. Instead, you need to have a profit and loss sheet of your company that is up to date to the current date. This sheet is known as the balance sheet. When it comes to the size of the organization, big organizations have separate applications and staff members to always keep an eye on the net equity of the organization but that’s often not possible for the small organizations with limited resources and profit margin. In this scenario, you can just create the balance sheet and find out the real value of your business. These balance sheets can be created every month, every quarter, or annually.
Free Balance Sheet Templates
Here are free Balance Sheet Templates in MS Excel format to help you prepare your Balance Sheet quickly.
Guidelines to Create Balance Sheet for Small Business:
The assets that are ready to be sold in less than one year are known as short-term assets or current assets. Unlike long-term assets, these are the assets that you can sell for money at any given time and you don’t need to wait for a specific period to be over before you can transfer the ownership of these assets in return for money. Some of the most common short-term assets include; actual cash in the account, investments, accounts receivable, accounts receivable of employees, insurance, available inventory, and notes receivable. When you take a look at these assets, you instantly understand that it’s not difficult for the organization to convert these assets into cash at any given time and that’s why these are put into a separate category named short-term assets.
On the other hand, long-term assets are the ones that you can’t sell for cash in less than one year and these are the ones that help your organization increase their value over time. Within the category of long-term assets, there are 3 subcategories including; fixed assets, long-term investments, and intangible assets. Fixed assets are the ones that you are not going to sell in less than one year and these include machines, equipment, office buildings, furniture, and properties that your organization owns. In the same manner, long-term investments are also considered long-term assets because you don’t want to sell these stocks and shares in less than one year. Then there are intangible assets that you can’t see with your eyes but they are still there to provide better value to your company and these include; copyrights, patents, trademarks, and the reputation of your organization in the market.
Then there is the list of liabilities that you need to enlist to complete your business’s balance sheet. Again, these liabilities are also converted into two categories; short-term liabilities and long-term liabilities. Short-term liabilities are the ones that the organization has to pay within one year. This includes accounts payable, taxes, shareholder’s cuts, advance deposits from customers and clients, and short-term debt that your organization owes.
When you see the list of short-term liabilities, you will realize that many liabilities are not listed here. These are the long-term liabilities and they fall under a separate category. Long-term liabilities are the ones that your organization needs to pay but there is no rush to pay off these within one year. Some of the common long-term liabilities include; capital leases that you take on your equipment, retirement liabilities and pension funds, deferred compensation, and deferred tax.
Prepare Owner’s Equity:
Once you complete listing short-term assets, long-term assets, short-term liabilities, and long-term liabilities, it’s time to calculate the final figure at the end of the balance sheet. Basically what you need to do is to add short-term and long-term assets and then add short-term and long-term liabilities. Then you need to deduct the final assets from final liabilities and the remaining amount is the equity. This figure may be negative because the company owes more than it owns.