Balance sheet template
A balance sheet is a snapshot of what your company owns (assets), what it owes (liabilities) and what's left for the owners (equity) on one date, usually the last day of the financial year. This free Excel template lays it out the way UK small-company accounts do, compares this year with last year, and has a check line that tells you if it doesn't balance.
Running a company of 30 to 200 people? Documents like this are now worth money.
It includes a worked example for a fictional wholesaler and a ratios sheet, so you can see what the numbers say about the business, not just what they are.
What's in the template
Three sheets: the Balance sheet to fill in (this year against last year, with a change column and a check line that must be zero), an Example for a fictional 70-person wholesaler, and Ratios (current ratio, quick ratio, gearing and net assets) worked out from the example. The example in summary:
| At 31 December | This year | Last year |
|---|---|---|
| Fixed assets | 398,000 | 417,000 |
| Current assets | 1,271,000 | 1,129,000 |
| Creditors due within one year | -591,000 | -549,000 |
| Net current assets | 680,000 | 580,000 |
| Creditors due after more than one year | -120,000 | -160,000 |
| Provisions for liabilities | -24,000 | -21,000 |
| Net assets | 934,000 | 816,000 |
| Total equity (capital and reserves) | 934,000 | 816,000 |
Net assets and total equity are equal, which is the whole point: the balance sheet balances.
What goes in each section
- Fixed assets: things the company keeps and uses for more than a year: equipment, vehicles, property, software and goodwill (intangible assets), and long-term investments.
- Current assets: things that turn into cash within a year: stock, money customers owe you (trade debtors), prepayments, and cash in the bank.
- Creditors due within one year: what you must pay within twelve months: suppliers, VAT, PAYE, corporation tax, accruals and the short-term part of loans.
- Net current assets: current assets minus those creditors. A negative number is a warning about your ability to pay the bills.
- Creditors due after more than one year and provisions: longer-term loans and known future costs.
- Capital and reserves: share capital plus retained profits. It always equals net assets.
How to fill it in
- Take each balance from your accounting system's trial balance at the year end.
- Enter last year's figures from last year's accounts so the change column shows what moved.
- Check the bottom line is zero. If it isn't, the usual suspects are a missing loan, a director's loan account, or this year's profit not yet added to retained earnings.
- Read the Ratios sheet: the current ratio (current assets over short-term creditors), the quick ratio (the same without stock), and gearing (borrowing against equity).
Worked example: what the numbers say
The fictional wholesaler grew net assets from 816,000 to 934,000 in the year. Its current ratio is about 2.2, so it holds more than twice as much in short-term assets as it owes in the short term. But stock and debtors both rose faster than cash, which is worth a question: are customers paying more slowly, and is stock building up? The cash flow statement template uses the same company and shows how much cash that growth absorbed.
Common mistakes
- Mixing up the date: a balance sheet is at a date, not for a period.
- Leaving out the director's loan account, which can be an asset or a liability.
- Putting a whole loan in long-term creditors when part of it is due within twelve months.
- Forcing it to balance with a "suspense" figure instead of finding the error.
Frequently asked questions
Is this the same as the balance sheet in our statutory accounts?
It follows the same layout, but statutory accounts must follow company law and accounting standards and are filed with Companies House. This template is for management use; your accountant prepares the statutory version.
What's the difference between a balance sheet and a P&L?
The P&L shows profit over a period. The balance sheet shows assets and liabilities at a point in time. Retained profit from the P&L flows into the reserves on the balance sheet.
Why must it balance?
Because every asset is funded either by a liability or by the owners. Net assets (assets minus liabilities) must equal equity, so a non-zero check line means an error.