A balance sheet is a financial document that shows what your business owns (assets) and owes (liabilities). It helps lenders understand your business’s financial health. Even if you don’t have assets or liabilities, you still need a balance sheet.
Here’s what you need to know:
Assets are everything your business owns, like cash, equipment, or inventory.
Liabilities are debts your business owes, like loans or credit card balances.
Equity is the value left after subtracting liabilities from assets.
The total of your assets must always equal the sum of liabilities and equity (Assets = Liabilities + Equity).
For the balance sheet to be accurate:
It should match the dates of your profit & loss statement. For example, if your P&L shows data up to August 15th, your balance sheet should also say "as of August 15th."
The liabilities section must match your debt details. For example, if you list a $33,000 credit card debt on the balance sheet, it should also appear with the same details on your debt schedule.
If you use QuickBooks or other accounting software, you can easily download your balance sheet. If not, you can work with your CPA or use our downloadable template.