How to create a balance sheet template

Balance sheets are one of the core financial statements in accounting. They provide a snapshot into the company's financial status at a specific point in time. A balance sheet template that is purpose-built for your company provides more accurate long-term data, easier reporting, and a better user experience.

What is a balance sheet template?

Balance sheets summarize and present the equation: Assets = Liabilities + Equity (alternatively Equity = Assets – Liabilities), for your organization at a certain date. These statements are generated regularly and will likely contain many of the same fields over the long term.

A balance sheet template that includes specific fields for your company’s assets, liabilities, and equity speeds up the generation of these financial statements. It also provides more consistent data over time, making future analysis and data-driven decisions more accurate and effective

What to include on a balance sheet?

The goal of a balance sheet template is to identify and organize the different components of the sheet into a format so that the specific financial data required is easy to enter and read. This can be broken down into these sections:

Header:

At the top of the template, with the name of the company or organization, and the date of the balance sheet.

Assets:

Current Assets: List all current assets such as cash, accounts receivable, inventory, and any other assets that can be converted into cash within one year.

Non-current Assets: Include non-current assets such as property, equipment, investments, and intangible assets like patents or trademarks.

Liabilities:

Current Liabilities: List all short-term liabilities such as accounts payable, accrued expenses, and any short-term debt obligations.

Non-current Liabilities: Include long-term liabilities such as long-term debt, deferred tax liabilities, and other obligations that extend beyond one year.

Equity:

Shareholder's Equity: Include common stock, additional paid-in capital, retained earnings, and any other equity accounts.

Total:

Calculate total assets, total liabilities, and total equity.

Different organizations will have different requirements for the above sub-fields. Ideally, the balance sheet should have as much detail as possible without sacrificing clarity. The example below contains several additional fields or sections, the addition of these sections adds clarity to the document.

Balance sheet template example

Here is an example of a great free balance sheet template from Smartsheet. Note that they have included a section for Ratios at the bottom, providing more insight. Sections like these might not come to mind right away, so it’s important to make sure your balance sheet can grow and scale as your organization and your needs do.

How do I create a balance sheet template?

Creating a balance sheet template means organizing the different components of a balance sheet into a clear format that can be easily filled out and read. Here's a quick guide and some key questions to answer that will help you build the template that’s best for your needs:

Define the purpose of your balance sheet template

What is the end goal of the balance sheet template? Is it for internal use only, reporting to stakeholders, or for compliance purposes? Understanding the purpose will help tailor the template accordingly. You may want to highlight or draw attention to certain sections depending on this goal or this may inform the number of previous entries displayed. For example, the sample balance sheet template above displays 5 years of data.

Identify required sections

The three main sections will be assets, liabilities, and equity. Within each section, identify specific accounts relevant to your business, such as cash, accounts receivable, accounts payable, etc. The main sections will be the same for most companies, however the subsections and number of previous entries may vary.

Choose a format

For most organizations, this will be whichever works with your preferred accounting or financial software. Otherwise, it could be a spreadsheet (e.g., Excel, Google Sheets) or a document (e.g., Word, PDF). Dedicated FP&A software will almost always be preferred, more on that in the best practices section below.

Design the layout

Design the layout of the balance sheet template. Legibility is essential here, so don't be afraid to leave extra space around fields so that larger numbers can still be read clearly. Take full advantage of the formatting tools you have available to you to keep the sheet organized and legible. For example, make use of bold type and shades of a color to subtly differentiate sections.

Add formulas if applicable

If you choose to make your balance sheet template in Excel or Google Sheets, add formulas to automatically calculate totals and ensure they’re accurate. Formulas will streamline the process and minimize the chance of human error.

Test the template

Before finalizing the template, test it with sample data to ensure calculations are accurate. Be sure to involve team members who may end up using the template for better testing and feedback.

Review and finalize

Review the template thoroughly to ensure it accurately reflects your company's financial structure and meets your reporting needs. Once satisfied, finalize the template for regular use.

Document instructions

If the template is used by others, having a short accompanying document with instructions or guidelines on how to fill it out correctly will be extremely helpful to future users. This will improve consistency and accuracy over time.

Implement and update as needed

Integrate the balance sheet template into your existing process. It’s important to regularly review and adapt the template as needed when business, user, or reporting needs change.

Balance sheet template best practices

Include instructions

As mentioned above, even if this balance sheet is going to be used only by you and your team, you never know when someone else may need to know how to properly enter financial data. A brief set of instructions to guide users on how to fill out the template accurately can help to avoid future issues.

Consider automation

Using dedicated financial or accounting software has a lot of benefits, particularly for recurring processes like balance sheets. Software that offers both pre-made templates and options for customization is ideal, letting you get started quickly and iterate as needed.

Keep the formula in mind

The formula is the format. Throughout the process of creating a balance sheet template, keep in mind the formula that this statement is meant to present. If that formula is a variation on Assets = Liabilities + Equity, then ideally your balance sheet template will reflect that. Consistency like this will help avoid errors over time.

Balance sheet templates: Spreadsheets versus FP&A software

Creating a balance sheet template with Excel or Google Sheets is a lot more hands-on than using financial planning and analysis software. A spreadsheet solution may also be more customizable than using FP&A software. However, they are much slower and far more error-prone than dedicated software.

FP&A software that is already integrated into your data sources can automate balance sheet data entry, preventing any potential human error and creating more reliable statements. These balance sheets can then be used in the same software for additional activities, streamlining reports and reconciliations.

Make balance sheet reconciliation easy with Prophix One

The goal of any financial or accounting template is to streamline processes and keep your statements consistent and accurate. Making sure that your financial software has both the customization and automation you need is the first step towards those goals.

Prophix One Account Reconciliation frees you from slow and error-prone manual tasks that get between you and your close. Check out Prophix One to streamline balance sheet creation and updates without an hour of manual work.