Knowing how to maintain your expenses, cut down overheads, and increase your net profit is essential in any form of business. Yet, business owners get rushed into inefficient and manual ways without exploring other options. Essential services and tools such as an automated balance sheet template are necessary for efficient working.
You can get access to an easy and helpful tool to manage your small business finances with a simple balance sheet template.
This is where gini's balance sheet template can help any business owner understand the strengths and weaknesses of their business.
To understand how a balance sheet template works, it is essential to have a clear understanding and information about balance sheets. A financial statement containing an individual or company's assets, liabilities, and shareholder's equity is known as a balance sheet.
Balance sheets are an important presentation of what a company owns and owes during a specific time. It is usually called the financial period.
The balance sheet is also called a snapshot or statement of the financial situation of a business or company. A balance sheet can reflect the number of assets and liabilities after the accounting period of 12 months ends.
It is a fully customizable Google Sheet model or report for a balance sheet that you can duplicate and manually edit. It serves as a foundation to build your company's financial statements. Income statements, cash flow statements, and balance sheets work together to help business owners evaluate their business per the financial model.
A balance sheet template has several uses and benefits. Some of them are listed below, so you can get an idea about them and create your balance sheet template for a small business or a company:
So what does a balance sheet show? The typical balance sheet template includes three basic parts: assets, liabilities, and equity.
A business's assets is any resource that has a financial value. An individual or company has ownership or control and can sell it in exchange for money.
Assets in a balance sheet template can be split into two categories: Current and fixed assets.
Current assets, usually referred to as liquid assets, are short-term assets. The individual or company has to act as these assets, such as convert them into cash, use them by any means, or sell them within the first fiscal year. There are seven types of current assets:
Non-Current assets provide long-term benefits to an individual or company. These long term assets have a valuable life of up to one year, such as property, tools, vehicles, and furniture. The owner of a fixed asset uses it to generate revenue and produce valuable goods. Eventually, they will fulfill their investment purposes. There are mainly two types of non-current assets.
Liabilities in the balance sheet template are anything that costs an individual or company any value or expense. All expenses and costly matters that are still in process and you haven't paid them yet count in liabilities. You can take examples of mortgages, unpaid bills, and the amount of money you owe to someone also included in liability.
The company must pay its short-term liabilities within a typical financial year. For example, income taxes, rental fees, payroll taxes, and utilities are part of the company's current liabilities.
As the name suggests, non-current/long term liabilities can change at any time. The company or an individual has to manage his financial imperative for more than a year.
When all the liabilities (current & non-current) are subtracted from the assets (current & fixed), the remaining belongs to the owner and is called owner's equity. Equity in accounting and finance has two elements: Share capital and retained earnings.
Share capital is the amount of money an individual or company invested in a business. These investments are called preferred shares and also common shares. Moreover, the exchange of selling shares and raising funds between a company and its investors is also called share capital.
The second half of the owner's equity is retained earnings. It is the profit an individual or company gets after subtracting all liabilities, such as income taxes and share capital. The company uses this profit to strengthen its business and invests in marketing and new equipment.
Financial reporting in accounting and finance typically has two general formats: Report format and account format. Both forms of a balance sheet template have similar content but different settings.
This form of balance sheet template is popular with standard balance sheets. All the information about a company's assets, liabilities, and equity is part of the vertical form.
The account form of any balance sheet is opposite to the report form. The presentation of assets on account format is on the left side. In contrast, the proportion of equity and liabilities is on the right.
A balance sheet summarizes an individual's assets, liabilities, and equity over a specific time. The complexity of a balance sheet depends on the scale of a business. A simple balance sheet template is more likely to be drawn by individuals and small business owners. On the other hand, large enterprises prepare complex business balance sheet templates and present them in their annual report.
A typical balance sheet with proper management follows a simple accounting equation where the total assets are equivalent to the sum of total liabilities and full owner's equity.
The simple accounting equation: Assets = liabilities + owner's equity
There are three states of a company under the accounting equation of a balance sheet template.
Using the gini balance sheet template is easy and accessible. It will help you build your business's financial statement by calculating your assets, liabilities, and owner's equity.
Follow the given steps to use the gini balance sheet template:
Here are some primary benefits of the gini balance sheet template for your businesses
Although you have excellent knowledge of your small or large business, you must know about balance sheet templates. It will give you an overview of your investments, profits, and debt-to-equity ratio.
In addition, you will get to know about your business weaknesses and strengths. With the help of this article, get to know about the balance sheet template, maintain your business finances, and get ahead of the curve
P.S. We also have an income statement template, which you can preview here.
As a founder, you may lack the requisite educational background and skills to navigate business financial accounting. Hiring a chief financial officer or outsourcing to other finance professionals may put a strain on your budget.
At gini, our mission is to simplify business financial accounting for founders so they can easily set and reach their financial goals. We also have other templates that make tracking and managing your business finance easy.
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