As a business owner or accountant, you should understand and learn how to read and analyze a balance sheet for your business. This document provides an overview of your business’s financial standing. In this article, we will discuss in detail balance sheets and a few free balance sheet templates.
What is Balance Sheet
A balance sheet is a company’s financial statement that lists its assets, equity, and liabilities. Assets account for everything a company owns, like money in the bank, investments, and physical capital. Liabilities are everything that a company owes, such as debts. Lastly, equity is a company’s net worth.
The primary role of a balance sheet is to organize all this information in such a way that it is easy to read and understand. It helps to provide helpful insight into a company’s finances and allows comparing competitors.
There are three main sections of a balance sheet- Asset, Liability, and Equity:
Asset: There are two types of Assets- current and noncurrent assets. Current assets can be converted into cash easily within one year or one business cycle. These types of assets are short-term, such as cash, cash equivalents, inventory, accounts receivable, etc.
Noncurrent assets are fixed assets or items that can’t be liquidated within one year or one business cycle. Examples of noncurrent assets are fixed, intangible, and long-term investments.
Liability: Similar to Assets, Liability has two types: current and noncurrent. Current liabilities include an amount that needs to be paid within one year. Some examples of current liabilities are salary, wages, interest, customer prepayments, dividends, and accounts payable.
Noncurrent liability consists of payments your company must pay in more than one year. Pension fund liabilities, deferred tax liabilities, and principal on issued bonds are a few examples of noncurrent liability.
Equity: Equity is capital contributed by shareholders to the business. Equity consists of paid-in capital and retained earnings. Different types of equity are owner’s equity if you are the sole proprietor of your business and stakeholder’s equity if your business is a corporation.
Importance of Balance Sheet
Here are a few reasons why every company needs balance sheets:
- A balance sheet helps you understand your business’s financial position and net worth at a given time.
- It helps stakeholders understand the business’s liquidity position and its performance.
- Studying the balance sheets over the years determines the company’s growth and helps foresee future financial plans.
- The balance sheet is considered an essential document if your business needs any loan.
- Analyzing a balance sheet is the best way to determine your company’s ability to undertake expansion projects and identify unforeseen expenses.
- It will help you keep track of your equity funding and debt funding.
Examples
Following is the example of a balance sheet using the account form:
Following is the example of a balance sheet using report form:
Here are a few balance sheet templates that are easy to download and edit to create one for your business:
Microsoft 365
Microsoft 365 provides pre-made templates or designs for Business, Presentations, Planning, Instagram Stories, Financial Management, and more. The platform lets you search professional design templates on various topics, styles, or colors.
It allows you to customize templates with text, design, or video elements per your brand style.
Key Features:
- It offers various balance sheet templates to download directly or open in Excel in the browser.
- You can easily customize the Excel as per your requirement.
- The template can be used in Microsoft Excel and downloaded in XLSX format.
- The platform allows you to create the balance sheet template entirely from scratch.
The templates are completely free to download and easily customizable.
Wise
Wise is a global financial technology company popularly used as foreign exchange. The platform allows keeping multiple currencies on one account. It helps businesses to connect to their customers from all over the world. One of its products is Free balance sheet templates that help businesses capture their net worth at a given time.
It offers three balance sheet templates-
- The basic and simple balance sheet template to review your company’s financials. The file will be downloaded in XLSX file format.
- The second one is the Business balance sheet template which will help you gain helpful insight into your business and provide you with a more comprehensive overview. The file will be downloaded in XLSX file format.
- The last one is the Google sheet balance sheet template, which you can directly open in your browser as Google Sheets and start creating your balance sheet.
All three balance sheet templates are completely free to download. Wise allows seamless integration with Xero online accounting, which will help your business grow.
Smartsheet
Smartsheet is a powerful software helping businesses and teams manage projects, automate processes, and scale programs. It is not only a productivity and task application; other important features of the platform are real-time reporting and end-to-end work execution.
It also provides a free balance sheet template for businesses to review their financial goals and position.
Key Features:
- Basic Balance Sheet Template- It’s a simple and basic template to overview your business’s financial situation.
- Pro Forma Balance Sheet Template- This template suits existing business and business plans.
- The monthly Balance Sheet template will help you meet your monthly financial goals.
- Investment Property Balance Sheet Template- It will help you track the investment property’s growth in value.
- Daily Balance Sheet Template- With this template, you can keep track of daily assets, liabilities, and equity.
- Quarterly Balance Sheet Template- This template will help you track your quarterly financial position.
All the templates are available to download as Excel sheets and open as Google Sheets on browsers and are completely free.
Vertex42
Vertex42 is a popular platform for creating professionally designed templates for various purposes such as business, home, personal, and educational. Some templates provided by Vertex42 are Cash Flow Spreadsheets, Microsoft Excel Templates, Payroll Time Sheets, Business templates for Excel, Balance Sheet templates for Excel, etc. The balance sheet template by Vertex42 helps your business track its net worth at a given point.
Key Features:
- This template is available for Excel 2007 or later, Excel for iPad/iPhone, and OpenOffice, and available to open as Google Sheets.
- It is best suited for small business owners.
- The balance sheet template works well for a two-year comparison and includes all common financial ratios.
- Vertex 42 provides an income statement to go along with your balance sheet.
The templates provided by Vertex42 are free to download and don’t need any installation or macros but are simple editable spreadsheets.
FreeDownloads
FreeDownloads is a platform to download Documents and templates like Balance sheet templates, Last Will forms, Loan agreement templates, and more. All the documents are completely free to download, and each comes with various types and file formats.
Key Features:
- It lets you download balance sheet templates for various types like Accounting, Bank, Business, Church, Farm, and more.
- Each type can be downloaded in formats like Adobe PDF, MS Excel, MS Word, Rich Text, and Powerpoint.
- Most of the templates are customizable as per your requirements.
You can easily download a free balance sheet template by choosing the type and format.
FreshBooks
FreshBooks is an Invoice and accounting software providing solutions like Invoicing, Time tracking, Accounting, Reports, Bookkeeping, and more. The software is best for freelancers, professionals, and businesses. You can easily manage your financial numbers with FreshBooks’ balance sheet template.
Key Features:
- FreshBook allows you to select the balance sheet template format and customize it as needed.
- It also allows for creating a list of assets and then categorizing them.
- You can add your company name, logo, contact details, expenses, income, etc.
- The template can be used with Microsoft Excel, Microsoft Word, and Google Docs.
- You can download the template in XLX, DOC, PDF, Google Docs, and Sheets.
- If you want a different format, the Google Doc format is customizable and can be used in the format you need.
It allows you to download the balance sheet template for free and customize it as required in no time.
CFI
CFI is an online training platform with over 150 on-demand courses, 300+ CPE credits, certifications, and other resources to help professionals excel in their careers.
The platform has courses on various subjects like Accounting, Excel, Capital Markets, Data Science, Machine learning, and much more.
Key Features:
- This template allows you to add and remove line items under current and long-term assets, current and long-term liabilities, and equity.
- The sheet will help you calculate different financial ratios automatically.
- The template has a “check” line, allowing you to detect unbalanced between your assets, liabilities, and equity.
- The template will be downloaded in XLSX file format.
To download CFI’s balance sheet template for free, you must enter basic details like your first name, email address, and topic of interest.
Wolters Kluwer
Wolters Kluwer is a global solution provider in Health, Tax and Accounting, ESG, Compliance, Legal, and Finance. The company provides solutions, services,s and professional information with its advanced technology to help businesses.
Key Features:
- It lets you download balance sheet templates for Microsoft Excel version 4.0 and above.
- You can quickly fill in all your account balances, and the template will let you know if the sheet doesn’t balance.
- The template can be easily modified as per your requirement.
- The template is best suited for sole proprietorship but can easily be modified for partnership or corporation.
The balance sheet template is completely free to download and can be downloaded with just one click in XLT file format.
Xero
Xero is an excellent accounting software for accountants, small businesses, and bookkeepers. Some of the platform’s features are it helps you pay bills and claim expenses. Bank connections and more. It will help you track your business numbers as and when you want.
Key Features:
- The free balance sheet template will help you keep tabs on debt and get a summary of the financial state of your business.
- The platform will send a how-to guide and a template to help you use it.
- The paid version of the app allows you to capture the financial data and create a balance sheet as and when you require it with customizable formatting.
- With the paid version, you can create up-to-date reports, share easily online, and show results as graphs.
To download the free balance sheet template, complete a form with details like your email address, location, industry, and business type. You will get your template in your email. The paid version provides a 30-day free trial period and paid plans for a $25 per month starter plan, $40 per month standard plan, and $54 per month premium plan.
Clockify
Clockify is a time teaching and timesheet platform with features like Time tracking, Activity tracking, Calendar management, Budget management, Customizable templates, and much more.
Clockify is available for Chrome, Linux, Edge Mac, Windows, Linux, Android, and iOS.
Key Features:
- It allows you to download reusable balance sheet templates in XLSX file format.
- This template is suitable for personal use, private company, and small business.
- It allows you to add your company’s basic details and dates.
- This template is simple, where you can add your Assets, Liabilities, and equity, and the total and financial ratios are calculated automatically.
The platform allows you to download the file on your PC or open it directly in Google Docs in your browser.
Spreadsheet 123
Spreadsheet 123 is a popular platform for spreadsheet templates for Microsoft Excel, Google Docs, and Open Office. It provides budget spreadsheets, retirement savings, Balance sheet spreadsheets, and business templates.
Key Features:
- It allows you to download the balance sheet template in two file formats XLS (Excel 2003 XP) and XLSX (Excel 2007 +).
- You can edit the template to add your company name and date.
- You can monitor your business’s assets and liabilities over three years.
- This template requires Microsoft Excel 2003 and higher and can be used on PCs and Macs.
- It is used by both old and new businesses to track trends over a number of years.
- Your business can use the spreadsheet to check areas for improvement.
The platform allows you to download the template easily by clicking on the type of file format you want, and it’s completely free.
FinModelsLab
FinModelsLab allows you to download industry-specific Financial model templates in Excel, business plan templates, excel dashboards, and much more. The platform offers a monthly balance sheet template to help companies track their monthly financial position regarding assets, liabilities, and shareholders’ equity.
Key Features:
- It allows the creation of a professional and functional balance sheet easily.
- You can download the monthly balance sheet template in XLSX format.
- The template will allow companies to perform better analyses and conduct more profound research.
- With this template, you can easily measure capital structure, leverage ratios and assess potential fundraising.
- It will help you value your business and monthly financial position.
The template is completely free, but you need to add the template to your cart and enter your email, name, and other details. The template will then be sent to your email from where you can download it.
Toggl Track
Toggl Track is a time-tracking application with amazing products like Balance sheets, Billing and invoicing, Reporting, Time tracking, Payroll, Project budgeting, etc. The platform is available as a Web app, Mobile app, and Desktop app, allowing over 100 app integrations.
Key Features:
- This template comes in Excel file format, so you can easily use it with Google spreadsheet or Microsoft Excel.
- It is very simple to print it; you just need to fill out the spreadsheet.
- It allows you to download blank spreadsheets, so it is easy to reuse them as often as you want.
- You can customize it with your company details and other edit formatting.
- The design of this template is intuitive, clean, simple, and very professional.
With this platform, you don’t need to sign up with your email or follow multiple steps; it’s completely free; just click download, and you are ready to go.
Final Words
It is clear that balance sheets are essential for a business to keep its owners informed about their financial position. Many businesses fail to identify their company is in trouble, and maintaining a balance sheet will help you solve that at an early stage.
You don’t need to create a balance sheet from scratch; you can choose one of the best templates mentioned in this article as per your need and start creating one for your business.
You may also explore some best free personal finance Excel templates for budgeting.
