A balance sheet helps you quickly grasp the financial health of your business and provides a snapshot of it for potential lenders or investors. Whether your business is deep in debt or owns considerable assets, a balance sheet enables you to keep track of your current situation and plan for the future. Keeping an accurate balance sheet involves maintaining ongoing records of assets and liabilities using strategies such as regularly balancing your checkbook, and keeping track of bank account and credit card statements.
Set up your balance sheet using a columnar pad or computer spreadsheet. Use the upper section of the document to show your assets. Dedicate a line for each type of asset that you own, such as checking accounts, savings accounts, cash on hand, property, inventory and accounts receivable. Use the lower section of the document to show your liabilities. Dedicate a line for each type of liability, such as money owed on bank loans, credit cards and purchasing accounts. Use the very bottom of the sheet to tally your net worth, or the sum total of your liabilities subtracted from the sum total of your assets.
Fill in your balance sheet using current information about your assets. Use bank statements, deposit records and mortgage statements. Use credit card statements, loan statements, unpaid bills, payroll records and supplier billing statements to obtain information about your liabilities. Include every relevant financial record. Create lists and accounting sheets for assets or liabilities that do not provide you with formal statements, such as a journal of cash on hand, a list of equipment or inventory, or a journal of personal loan payments. Calculate your net worth by adding your total assets and your total liabilities, and subtracting your liabilities from your assets.
Update your balance sheet at appropriate intervals. If your financial situation is prone to change rapidly, with new investments and debts, update it weekly or monthly, or whenever you make an important change. If you earn, borrow and repay money consistently and incrementally, you will not need to update your balance sheet as often.