All types of businesses create a balance sheet at the end of each financial period. A balance sheet is a financial statement that shows a “snapshot” of the company’s financial condition on the particular date it is prepared. A balance sheet for a cleaning service looks similar to a balance sheet for any other type of business. The statement separates the company’s assets, liabilities and equity accounts and ensures that these accounts are all in balance.
Prepare the heading. Every financial statement begins with a heading that states the company’s name, the type of financial statement and the statement date.
List all of the company’s assets. A balance sheet is created by placing all of the assets on the left-hand side. The account name is included, as well as the balance of the account on the statement date. The assets are separated into the categories of current assets, investments, property plant and equipment, intangible assets and other assets. Some common assets of a cleaning business might be cleaning supplies and equipment.
List all of the liabilities. When constructing a balance sheet, all liabilities are listed on the top part of the right-hand column. They are divided into short-term and long-term liabilities. Unearned revenue is a common short-term liability for a cleaning service. This account represents money the cleaning service received for work not yet performed. This often occurs from cleaning contracts that were prepaid.
Write in the equity accounts. For a cleaning business, depending on the size, there may be one or more owners. Each owner has his own equity account. An equity account represents the owner’s rights to the business. Each equity account is listed on the bottom part of the right-hand side, and the accounts are totaled up.
Add the total liabilities and total equity account amounts. This amount is placed on the bottom line of the right-hand column of the balance sheet. This amount should be equal to the total asset amount listed on the bottom line of the left-hand column.