How to make a balance sheet in Excel: Free template

A balance sheet shows your business’s assets, liabilities, and equity at a moment in time. Without it, you can’t accurately track your company’s financial health.

Building one from scratch in Excel can be time-consuming and prone to errors. Download Ramp’s free Excel balance sheet template to save time, stay organized, and improve accuracy in your reporting.

A well-structured Excel template gives you a clear picture of your finances and helps you keep assets, liabilities, and equity in balance.

What is a balance sheet?

A balance sheet is a financial statement that shows your company’s assets, liabilities, and equity at a specific point in time. It’s a snapshot of your financial health, highlighting what you own and what you owe.

Every balance sheet follows a simple formula:

Assets = Liabilities + Equity

• Assets: What your company owns
• Liabilities: What your company owes
• Equity: The value remaining for owners after debts are paid

The equation must always balance; your total assets should equal your total liabilities and equity.

Balance sheets in business

A balance sheet helps you track financial progress and make informed business decisions. It also promotes transparency by ensuring compliance with accounting standards and giving stakeholders an accurate view of your company’s position.

Regularly maintaining your balance sheet ensures financial statements reflect reality, which supports better management, planning, and reporting. Lenders and investors often rely on these statements when evaluating your business.

The balance sheet is one of three key financial statements. Here’s how it compares to an income statement and cash flow statement:

Key components of a balance sheet

A balance sheet has three main components: assets, liabilities, and equity. Understanding how they relate gives you a clear picture of your company’s financial health.

Assets

Assets are what your business owns that have value. Examples include:

• Cash on hand
• Accounts receivable, or money customers owe you
• Inventory ready to be sold
• Property, plant, and equipment (PP&E)

Assets are divided into two categories:

• Current assets: Short-term assets you can convert into cash within one year, like cash, accounts receivable, and inventory
• Noncurrent assets: Long-term assets that can’t be quickly converted to cash, such as property or equipment

Liabilities

Liabilities are what your business owes to others. Common examples include:

• Credit card balances
• Mortgages
• Short-term loans
• Long-term loans
• Bonds payable

Liabilities are also classified as:

• Current liabilities: Debts due within one year
• Noncurrent liabilities: Debts due after one year

Equity

The equity section reflects the value of funds shareholders have invested in the company, along with retained earnings. Retained earnings are profits kept in the business instead of being distributed as dividends.

The formula for shareholder equity is:

Shareholders’ equity = Total assets – Total liabilities

This represents the residual value of the company’s assets after subtracting liabilities. It includes both contributed capital and accumulated retained earnings.

Maintaining a healthy debt-to-equity ratio is key to long-term stability. While benchmarks vary by industry, a ratio between 0.5 and 2.0 is generally considered healthy.

Creating a balance sheet using Excel

Now that you understand the components of a balance sheet, let’s walk you through the step-by-step process to ensure your balance sheet is accurate, clear, and up-to-date.

Step 1: Set up your spreadsheet

Open a new Excel workbook and name the worksheet “Balance Sheet.” Create headers for “Assets,” “Liabilities,” and “Equity.” Add subheadings like “Current Assets” and “Long-term Liabilities” for better organization.

Step 2: Pick the balance sheet date

Choose a specific date for your balance sheet, typically the last day of the quarter (March, June, September, December) or the month if you prepare monthly reports.

Step 3: List all of your assets

Start by listing all your current assets (cash, accounts receivable) in order of liquidity. Follow this with non-current assets (property, equipment), ensuring you include both monetary and non-monetary assets.

Step 4: Add up all of your assets

Sum up all the assets listed to get the total asset value. Verify this total against the company’s general ledger for accuracy.

Step 5: Determine current liabilities

List all liabilities due within a year, such as accounts payable, short-term notes payable, and accrued liabilities.

Step 6: Calculate long-term liabilities

Identify liabilities that extend beyond one year, like long-term loans, bonds payable, pension plans, and mortgages.

Step 7: Add up liabilities

Combine the totals of current and long-term liabilities to find the overall liabilities value.

Step 8: Calculate owner’s equity

Calculate retained earnings (profits reserved for reinvestment) and total shareholders’ equity (share capital plus retained earnings).

Step 9: Verify the balance

Ensure that the sum of liabilities and owner’s equity equals total assets. If it doesn’t, review and correct any discrepancies.

By following these steps and maintaining regular updates, you’ll have a comprehensive and insightful view of your business’s financial health, enabling you to make informed and strategic decisions.

For a quicker solution, you can use Ramp’s pre-made balance sheet template to streamline the process. Download now!

Also, if you want a balance sheet template in word document format, download this template.

Customizing your balance sheet template

Understanding how to make a balance sheet in Excel is step one. Tailoring the template to your business makes it genuinely useful:

• Adding or removing line items: Right-click a row to Insert a new line or Delete one you don’t need. Rename labels so every line reflects a real asset or liability.
• Modifying formulas: When you add or remove rows, update any totals. Click a total cell to check the formula range and adjust it to include the right rows.
• Formatting and branding: If you plan to share the sheet with stakeholders, polish the presentation. Add your logo, align fonts and colors with your brand, and keep spacing consistent. Use cell styles sparingly so the numbers stay easy to read.
• Documenting assumptions: Add a short “Notes” area (date, preparer, methodology for estimates like depreciation). Clear notes make reviews and audits faster
• Versioning: Duplicate the tab for each period (e.g., “Balance Sheet – Mar 2025”) so you can compare changes over time without overwriting prior periods

Common tweaks to consider:

• Cash breakdown: Separate operating cash from restricted cash
• Receivables aging: Add a line for allowance for doubtful accounts
• Inventory detail: Split raw materials, WIP, and finished goods if relevant
• Debt schedule link: Reference a separate tab for loan balances and amortization
• Equity detail: Add rows for owner draws, additional paid-in capital, or treasury stock

Industry-specific customizations

Different business models call for small tweaks to the template so the totals still roll up cleanly.

Retail

• Add separate inventory lines for merchandise in stock, in transit, and goods on consignment
• Include sales taxes payable and gift card liabilities under current liabilities
• Track payment processors (e.g., card payouts) in accounts receivable and vendor balances in accounts payable

Service-based

• Replace inventory with unbilled revenue or work in progress for projects
• Add prepaid expenses for software, insurance, or retainers
• Include deferred revenue for upfront client payments as a current liability

Manufacturing

• Split inventory into raw materials, work in progress, and finished goods
• Add machinery and equipment under noncurrent assets, plus cumulative depreciation
• Consider a separate schedule for overhead allocation and depreciation expenses feeding back into the balance sheet

Tip for all three: When you add or rename rows, update the total ranges so assets, liabilities, and equity still tie out.

Balance sheet examples and best practices

Knowing how to create a balance sheet can be tricky. Here’s an example for a hypothetical company that shows how line items might appear:

Balance sheet ratios

Simple ratios help you interpret the numbers in your balance sheet:

• Current ratio = Current assets ÷ Current liabilities. A ratio above 1.0 suggests you can cover short-term obligations comfortably.
• Debt-to-equity ratio = Total liabilities ÷ Shareholders’ equity. Most industries aim between 0.5 and 2.0, depending on leverage tolerance.

Common balance sheet mistakes to avoid

Look out for these common issues when preparing your balance sheet:

• Not balancing the sheet: Your assets should always equal your liabilities plus equity
• Overstating assets: Use current, accurate values and account for depreciation
• Omitting noncash expenses: Non-cash expenses like depreciation or amortization affect true asset value
• Mixing personal and business finances: Keep them separate to ensure accuracy
• Ignoring accruals: Missing accrued income or expenses creates mismatched reports

Maintain clear documentation, compare against prior balance sheets, and use recognized accounting standards such as GAAP to ensure consistency and accuracy.

When and how often to update your balance sheet

How often you update your balance sheet depends on company size and reporting needs:

• Small business: Monthly or quarterly
• Mid-sized business: Monthly
• Large enterprise: Quarterly (as required by the SEC)
• Nonprofits: Quarterly

You should also refresh it when key financial events occur, such as:

• Major asset purchase or disposal
• New loans or repayments
• Change in ownership
• Mergers or acquisitions
• Company restructuring
• Financial audits

Year-over-year comparisons reveal growth and liquidity trends over time. Create a duplicate tab in Excel for each period so you can track changes and spot patterns easily.

Integration with accounting software

Automating your balance sheet with accounting software like QuickBooks, FreshBooks, or Ramp helps ensure accuracy and real-time reporting. Integration allows for:

• Real-time data updates
• Automatic classification of assets and liabilities
• Audit trails and version history
• Seamless connection to budgets and other financial reports
• Secure cloud storage

Using Ramp to simplify balance sheet creation

Creating a balance sheet is a simple way to organize and track your financial information. Using a structured template allows you to create a detailed balance sheet that includes your assets, liabilities, and equity, helping you understand your financial position.

Downloading our balance sheet template can help you prioritize regular monitoring and make informed financial decisions. When you’re ready to upgrade from Excel, Ramp simplifies the balance sheet creation process and accelerates month-end book closing.

Here’s how we can help:

• Ramp automates expense reporting, ensuring accuracy and saving you valuable time
• With Ramp’s platform integrated into your card, you get instant visibility into your spending
• Ramp lets you monitor expenses as they happen, keeping your financial data up to date and accurate

Ramp streamlines your financial processes, reduces errors, and speeds up your month-end close. Optimize your financial process with Ramp today.