Balance sheet is a vital part of financial statements of all organizations because without it you cannot effectively manage accounts of your organization. It helps you a lot to analyze the financial position of your organizations in the market and you can effectively measure the growth or decline rate of your organization. Balance sheet is designed to evaluate the assets and liabilities of your organization. You can take important budgeting and controlling decisions about your organization with the help of effective balance sheet. A typical balance sheet conclude assets including case, properties as well as inventories and liabilities including short term and long terms loans, bonds, shareholder’s equity etc. Usually investors and lenders take decision about the investment and financing in the organization after analyzing its balance sheet therefore it should be designed effectively.
Here is preview of this Balance Sheet Template created using MS Excel 2013,
Ideas to Design Effective Balance Sheet
Balance sheet is really important for all organizations therefore it is necessary to design it effectively. In order to make your work easy, I am going to share some tips to design effective balance sheet:
Manage Asset Side of Balance Sheet
- Initially, you have to prepare list of your all assets including cash in hand, cash at bank, tangible and intangible properties, equipments, buildings etc. In order to make your work easy, you have to make different categories such as cash, investments, accounts receivables, vehicles, furniture and other property etc.
- Assets will be further broken into different categories named as current assets and long term assets. Cash, saving accounts and any money will fall into current assets because these can be access easily.
- Long term assets include those assets that have future maturity value of more than one year such as life insurance, retirement fund, real estate building etc. After dividing your assets into different categories it will be easy for you to calculate total worth of your business.
Manage Liability Side of Balance Sheet
- After completing assets side, now it is time to work on liability side. Any future bill, accounts payable, bills due, mortgage balance, taxes and any other due payment should be written under the liability account.
- It will be good to divide your liability side into different categories such as current and long term liabilities. Credit card bills, utility bills and different other bills are fallen under the category of current liabilities.
- Long term liabilities are those that have payment period of one year such as car loan, taxes, mortgage loans etc.
- After writing all assets and liabilities, it is necessary to calculate both sides to get the net worth of your business. You can get the total worth of your business by having a different of both liability and asset sides.
It is necessary to update your balance sheet account on regular basis to get clear and up-to-date picture of your business. It will help you to take better steps for the prosperity of your own business. You can plan in better way for the expansion of your business.
Here is download link for this Balance Sheet Template,