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Most business owners don’t dive into entrepreneurship because they're excited about the accounting process. However, a basic understanding of accounting is important in helping you start and grow a successful small business. One of the most important financial documents business owners need to understand is the balance sheet.

Your balance sheet helps you understand the relationship between your income and your expenses to maintain profitability. This document will help you work with your business’s financial numbers to build a workable balance and forecast your business. 

Tips on Using the Balance Sheet Template

1. Your firm's balance sheet likely has more lines than this template. We recommend combining categories to fit into this compressed format for clarity and ease of analysis.
2. For projections, we recommend condensing your numbers. Most people find it helpful to express the values in thousands, rounding to the nearest hundred dollars; for example, $11,459 would be entered as $11,500. 
3. In the Fixed Assets section, the "LESS accumulated depreciation" figure is the total of all depreciation accrued over the years on all fixed assets still owned by the company. Enter it as a negative number so the spreadsheet will subtract it from Total Fixed Assets.
4. In Owner's Equity, "Retained Earnings-Beginning" is retained earnings from the last historical balance sheet or the end of the previous fiscal year. "Retained Earnings-Current" is a net profit for the period of the projections, less any owner's draw (for partnerships and proprietorships) or dividends paid (for corporations).

Have a question about this balance sheet template? Connect with a SCORE mentor online or in your community today.