Written by Behdad Karimi Dermeni, CPA · Reviewed by Maryam Ajorloo, CPA
A lender wants one. Your new accountant wants one. A potential buyer wants one. And you are staring at a blank spreadsheet wondering why a single page of numbers feels like a final exam.
Good news: a balance sheet is the most predictable report in accounting. It has 3 sections, 1 equation, and a built-in check that tells you when something is off. This free balance sheet template for Excel and Google Sheets does the math for you, and comes with a filled-in example so you can see what "done" looks like.
If you would rather skip the spreadsheet entirely, ReInvestWealth builds your balance sheet from your bank transactions, so it is ready whenever someone asks for it. Start free for 30 days.
Download the free balance sheet template
Download the balance sheet template (Excel, .xlsx)
The file has 3 tabs:
Balance Sheet: the blank template, with a "this period" and "prior period" column so you can compare year over year, plus 2 columns showing where each line goes on the IRS balance sheet (Schedule L) for Forms 1120-S, 1120, and 1065.
Example: the same sheet filled in for a one-person consulting LLC, with both columns balancing to the dollar.
How to use: the 6 steps below, a "why doesn't it balance?" checklist, and the IRS balance sheet rules for each business type.
Yellow cells are inputs. Every total, plus the balance check at the bottom, calculates on its own. It opens in Excel, Google Sheets (File, then Import), and Numbers. No email gate, no sign-up, no catch. (We checked. There is no catch.)
What goes on a balance sheet
A balance sheet is a snapshot of what your business owns, what it owes, and what is left over for you, on one specific date. The whole thing rests on one rule:
Assets = Liabilities + Equity.
Everything the business has was paid for either with someone else's money (liabilities) or with yours (equity). That is why it has to balance. If it does not, a number is in the wrong place, not missing from the universe.
Assets: cash in your business bank accounts, invoices clients have not paid yet (accounts receivable), costs you paid in advance (like annual software), equipment, vehicles, deposits, and any money the business lent you. Current assets turn into cash within 12 months; fixed assets are the things you use to run the business.
Liabilities: credit card balances, unpaid bills (accounts payable), payroll taxes you withheld but have not deposited yet, customer deposits for work you have not done yet, and loans. Anything due in the next 12 months is a current liability. The rest of a loan is long-term.
Equity: the money you put in, the profit the business has kept over the years, this year's net income, minus what you took out. For a sole proprietor or LLC this is owner's equity. For a corporation it is shareholders' equity, mostly retained earnings.
How to fill out a balance sheet in 6 steps
Pick the date. A balance sheet is "as of" one day, usually your year-end (December 31 for most small businesses) or a month-end a lender asks for.
Gather your statements for that exact date. Bank, credit card, and loan statements, plus your profit and loss statement for the year to date. Mixing dates is the number one reason a balance sheet comes out wrong.
Enter your assets. Bank balances on the as-of date, unpaid client invoices, prepaid costs, and equipment at what you paid for it. Depreciation goes on its own line as a negative.
Enter your liabilities. Card balances, unpaid bills, and each loan split into the next 12 months of principal and the rest.
Enter your equity. What you put in, earnings kept from prior years, this year's net income from your P&L, and this year's draws or distributions as a negative.
Check the bottom of the sheet. If it says "Balanced," you are done. If it says "Off by" a number, jump to the troubleshooting section below.
Fifteen minutes, if your books are up to date. Considerably longer if step 2 starts with "where did I put that statement?"
Balance sheet example for a small business
Here is the Example tab in plain English, for a one-person consulting LLC as of December 31.
Assets: $39,400
Business checking: $15,250
Business savings: $10,000
Accounts receivable: $6,250 in invoices clients have not paid yet
Prepaid expenses: $1,200 for software paid a year ahead
Equipment: $7,800 at cost, less $2,600 of accumulated depreciation
Security deposit: $1,500 on the office lease
Liabilities: $15,850
Credit card balance: $2,350
Customer deposit: $1,500 paid upfront for a January project
Business loan: $9,000 total, split as $2,400 due in the next 12 months and $6,600 after that
Loan from owner: $3,000 the owner lent the business
Equity: $23,550
Owner contributions: $5,000
Retained earnings from prior years: $6,550
Net income this year: $64,000
Owner's draws this year: minus $52,000
$15,850 of liabilities plus $23,550 of equity is $39,400. It balances.
Two things in this example trip people up. First, the $52,000 in draws is not an expense. It does not reduce profit; it reduces equity. (Our guide to the owner's draw walks through exactly why.) Second, the $1,500 customer deposit is a liability, not income, because the work has not happened yet. Money in the bank is not always money you have earned. Accounting enjoys a plot twist.
Owner's equity by business type
The equity section is where a generic template stops being helpful, because it changes with how your business is set up.
Sole proprietor or single-member LLC: owner's capital, owner's draws, and accumulated earnings. Your profit flows to Schedule C on your personal return, and Schedule C has no balance sheet section at all. You still want one, because lenders, landlords, and buyers ask for it.
S corporation: paid-in capital, retained earnings, and distributions. Owners who work in the business also take a salary, which is an expense, not a distribution. Our guide on how to pay yourself from an LLC or S-corp covers the split.
C corporation: common stock, additional paid-in capital, retained earnings, and dividends.
Partnership or multi-member LLC: a separate capital account for each partner, each with their contributions, share of income, and withdrawals.
The template uses owner-friendly line names that work for all four. A corporation reads "owner contributions" as paid-in capital and records dividends or distributions on the draws line.
When the IRS asks for a balance sheet
This is the detail most template pages skip. Corporations and partnerships report a balance sheet on their tax return, on Schedule L, unless they are small enough to be excused. For 2025 returns:
S corporations (Form 1120-S): Schedule L is not required if total receipts for the year AND total assets at year-end are both under $250,000.
C corporations (Form 1120): the same $250,000 receipts and assets test applies. When you do file it, the IRS says the balance sheets should agree with your books and records.
Partnerships (Form 1065): not required if receipts are under $250,000, total assets are under $1 million, K-1s go out on time, and the partnership is not required to file Schedule M-3.
Sole proprietors and single-member LLCs (Schedule C): no balance sheet on the return.
You can read the exact wording in the Form 1120-S instructions on IRS.gov. Thresholds can change, so confirm the current year with your tax preparer. Either way, a business that crosses those lines needs a balance sheet that ties to its books, every year. A clean one also makes life easier if the IRS ever has questions (here is how far back the IRS can audit a business, for the curious).
The template maps to Schedule L
Every row in the template has a column showing where it usually lands on Schedule L: one for Forms 1120-S and 1120, which share the same layout through line 23, and one for Form 1065. The ones people most often get wrong:
Equipment and accumulated depreciation: lines 10a and 10b on the 1120-S and 1120, lines 9a and 9b on the 1065.
Credit cards, payroll taxes withheld, and customer deposits: other current liabilities, line 18 on the 1120-S and 1120 (line 17 on the 1065).
Money you lent the business: line 19, loans from shareholders (line 19a, loans from partners, on the 1065).
Retained earnings: line 24 on the 1120-S. The 1120 splits it into appropriated (line 24) and unappropriated (line 25), and partnerships report partners' capital accounts on line 21 instead.
Your tax preparer makes the final call on placement, but a balance sheet that already speaks Schedule L saves a round of back-and-forth.
Book vs tax depreciation
Schedule L is a balance sheet "per books." Section 179 and bonus depreciation can let you deduct a new laptop or vehicle much faster on your tax return than you depreciate it in your books, so the two numbers often differ. Use your book figures in the template and let your preparer account for the gap on Schedule M-1. (Two sets of depreciation numbers, both correct. Tax law loves a sequel.)
Loans between you and the business
Money you lent the business is a liability. Money the business lent you is an asset, with its own Schedule L line (line 7, loans to shareholders). Keep the two on separate lines and keep the paperwork, because a "loan" to an owner that never gets repaid can end up treated as pay or a distribution.
This is where ReInvestWealth earns its keep: your Financial Reports generate the balance sheet, profit and loss, and general ledger from your categorized transactions, ready to share with your tax preparer. See how it works.
Balance sheet vs income statement
These two get mixed up constantly, so here is the short version.
Income statement (profit and loss): a video. It covers a period of time, like January 1 to December 31, and shows revenue minus expenses equals profit.
Balance sheet: a photo. It covers one moment, like December 31, and shows what you own, what you owe, and what is left.
They connect through one line. Net income from the income statement flows into equity on the balance sheet. That is why the template asks for this year's net income: if it does not match your P&L for the same dates, the balance sheet will not balance. Neat, and slightly ruthless.
Why your balance sheet doesn't balance
One thing we hear often from customers: "my balance sheet is off and I have no idea why." It is almost always one of these:
A transfer counted as income or an expense. Moving money from checking to savings is neither. It just changes which pocket the cash is in.
A credit card payment counted as an expense. If the card purchases are already expenses, recording the payment as an expense too counts everything twice. The payment is a transfer that reduces the card balance. (In ReInvestWealth, card payments are categorized as Interfund Transfers for exactly this reason.)
Owner's draws recorded as an expense. Draws belong on the equity side as a negative, not on the P&L.
The whole loan payment treated as an expense. Only the interest is an expense. The principal reduces the loan balance.
Net income that does not match the P&L. Same dates, same number, or it will not tie.
Statements from different days. The bank balance from December 31 and the card balance from January 6 do not belong on the same sheet.
Prior-year retained earnings that do not roll forward. Last year's closing equity, minus your contributions, is this year's starting point.
If you are off by an exact amount, search your records for that number first. A $412.18 difference is usually one $412.18 transaction sitting in the wrong place.
When you have outgrown the balance sheet spreadsheet
A spreadsheet is fine for a once-a-year snapshot. It gets painful when you need one every month, when you have more than a couple of accounts, or when you are copying numbers from five statements and hoping they agree.
Here is how to keep it painless, whichever route you take:
Pick one as-of date and stick to it. Month-end or year-end, the same every time, so period-to-period comparisons mean something.
Keep business money in business accounts. Every personal purchase on a business card is a future journal entry. If you are still on spreadsheets, our free bookkeeping template keeps the transactions behind this report organized.
Let your books produce the report. In ReInvestWealth you connect your bank, the AI Bookkeeper categorizes the transactions, and the balance sheet updates on its own. No copying numbers between files, and nothing to rebuild when a lender asks.
You could keep copying numbers from five statements into a spreadsheet held together by hope and conditional formatting. Or you could let the books build the report and spend that evening on something better. Built by CPAs, 30 days free. Start for free.
Frequently asked questions
Is this balance sheet template really free?
Yes. The Excel file is free to download, use, and share, with no email gate or sign-up. It includes a blank template, a filled-in example, and a step-by-step guide.
Does the balance sheet template work in Google Sheets?
Yes. In Google Sheets, choose File, then Import, and upload the .xlsx file. The formulas and the balance check carry over. It also opens in Excel and Apple Numbers.
Does a sole proprietor need a balance sheet?
The IRS does not ask for one on Schedule C, but lenders, landlords, investors, and buyers often do. A yearly balance sheet also shows whether you are building value in the business or just moving cash through it.
How often should a small business prepare a balance sheet?
At least once a year, at year-end. Monthly or quarterly is better if you have a loan, plan to borrow, or want to track how much the business is worth over time.
Where do owner's draws go on a balance sheet?
Owner's draws reduce owner's equity. They are not a business expense and do not lower profit. In the template, enter this year's draws as a negative number on the draws line in the equity section.
A note from our CPAs: This guide is educational and covers the general rules for US small businesses. Tax situations vary, so for advice on your specific circumstances, talk to your accountant. (If they use ReInvestWealth, they'll already have clean books to work from.)
Written by Behdad Karimi Dermeni, CPA
Co-founder of ReInvestWealth and a founding community builder at Stripe. Behdad built ReInvestWealth to give smart, busy entrepreneurs CPA-level accounting without the CPA-level price tag. Read more · Connect on LinkedIn
Reviewed by Maryam Ajorloo, CPA
Maryam Ajorloo is the co-founder of ReInvestWealth and a CPA who specializes in small business tax, sales tax, and everyday bookkeeping. She helps entrepreneurs keep clean, audit-ready books and make sense of write-offs, filing deadlines, and the numbers behind their business. Read more · Connect on LinkedIn
