Last month we talked about creating an internal income statement to analyze our financial data.
This month we will discuss the importance of an accounting balance sheet and look at a basic balance sheet example.
An accounting balance sheet is a portrait of your business at a point in time. It shows what your business owns and what it owes.
It is usually prepared at the end of the month, quarter, or year.
It can be a very valuable tool in your financial business decisions.
See a basic balance sheet sample and learn what an accounting balance sheet consist of: Accounting Balance Sheet Example
If you are using a double entry accounting software, a balance sheet is very easy to create. A click of a button will create a basic balance sheet. You can also run a comparison balance sheet and compare your current accounting balance sheet with a previous period.
Single entry bookkeeping systems such as my free spreadsheets do not include the ability to track assets and liabilities, so generating a balance sheet can be a little more difficult.
You will need to gather your assets and liabilities information and find a good free balance sheet template online.
If you want a balance sheet template that you can compare this year to a prior year … there is a nice balance sheet template on Practical Spreadsheets.
I like this one because you can modify it to suit your needs.If you want one that includes some common financial ratios, there is nice balance sheet on Vertex42 site. (Explanation of financial ratios)
The only thing I don’t like about this one is you cannot delete any rows or columns without buying his unlocked version. You can modify the categories though.
Vertex42 is also loaded with some really nice free Excel and Word templates, so you might want to bookmark this site.
I also have a basic balance sheet template you can download free from this site: Balance Sheet Template