Generally speaking, a balance sheet is used to determine the state of a given entity’s finances. If you analyze a balance sheet, then you are able to tell is a given entity’s finances are healthy based on whether income matches expenses. There are several free balance sheets that you can use for that purpose.
Startup companies in particular need to be able to read balance sheets so as to determine the health of their finances. After all, as startups, they are in a position of having to watch their finances closely in order to succeed, hence the need for balance sheet templates to help stay stable.
How Is a Balance Sheet Useful to a Startup?
Startups can find a particular need for tools like sheet templates in Word thanks to sheets providing startups with certain advantages:
- They allow for planning ahead. A balance sheet format also allows a company to see a projection of future conditions so that the company can strategize accordingly.
- They show the current financial state. This allows a company a realistic overview of its income and expenses so as to be aware of its resources.
- They provide a look at current issues faced by the company. A company can be made aware of any discrepancies between income and expenses so as to address them immediately.
Steps to Preparing a Startup Balance Sheet
As would be the case with established companies, startups would need sheet templates themselves. To that end, some of the steps to make one for a startup include:
- First choose a specific date, such as the first day of business. Proforma balance sheet templates are meant to correspond to specific dates and show the situation on those dates.
- List down all the company’s current assets that apply to you, which at this point should include startup capital, equipment, property, etc.
- Then list all the liabilities the company owes, which at this point should include accounts payable, bank loans, etc.
Tips for Writing a Startup Balance Sheet
You may also want to make use of particular tips that could help you with making your own startup business sheets. Of course, you could always use sheet templates in Excel and other aids, but it always pays to be aware of any insights that could help you accomplish the task more easily.
- Have an accurate idea of assets and liabilities. In the case of a business, you would have to explain your assets and liabilities in terms of capital, hence why this is important.
- Always double check your numbers. This helps ensure that you have tabulated all your data without making errors, or at least ensuring that the errors have been corrected.
- Be as accurate as possible with your numbers. This means that your numbers can be checked so that they reflect the actual situation.
- Keep the format simple. This makes your printable sheet templates much easier to understand, as everything is made for ease of use.
Hopefully, with these insights, you might be able to use balance sheets for your startup more easily so as to make use of them for your own business, whatever that may be.