QuickBooks Balance Sheet is an important financial statement to help you monitor the health of your company. A balance sheet gives the clear picture of a company’s net worth in a specific time frame, such as the end of the year. It reflects the company’s assets, liabilities and owner’s equity. It is very important to create and review this financial statement of your business to track the actual growth. The balance sheet is a two column table of statement of items that same, in the sense both the columns should balance. The columns are for the list of assets and liabilities. The assets that are owned by a company are the bank accounts, accounts receivable, buildings, equipment, investments, cash and inventory.
This section tells you which types of debt your company owes when they file bankruptcy. It includes a car loan, loan, the amount payable, mortgages, and credit card debt.
Why do You Need to Know the Balance Sheet?
The balance sheet shows you the insights according to the business’s net worth. So the balance sheet is an important document. It also shows you what your company has or what it owes. The assets list gives you key information that can be used to determine fair market value of your company. That helps you evaluate whether or not your company is worth investing in. The balance sheet provides an estimate by subtracting the amount of debt from the fair market asset value, which gives you the net worth of your business.
The Balance Sheet Components include Assets, Liabilities, and Equity.
There are 3 parts in the balance sheet. The example for those three parts are:
Assets comprise of the items of cash and property held by the company. Assets on the balance sheet are further divided into two categories: Current and Non-Current Assets.
- Accounts receivable (A/R): It is the amount of money owed to the company by a customer or client that is expected to be paid within a year.
- Inventory: comprise of raw materials, works in progress and finished goods produced or acquired for sale to customers in the normal course of business.
- Pre-paid expenses: are the amounts for insurance coverage or other expenses that are expected to be used or applied within one year.
- Cash: is that money in petty cash, deposits in checking and savings accounts, and any short-term investment.
- Marketable securities: includes stocks, bonds and other securities held for investment that are tradable readily.
- Property: Includes equipment and machinery, buildings and land, furniture and fixtures.
- Intangible property: are copyrights, patents and trademarks, as well as goodwill.
Also Read: QuickBooks Fixed Assets Report
Liabilities are debts or other obligations of the company that have a negative effect on net worth. There are two basic categories of liabilities: Current Liabilities and Long-term/Fixed Liabilities. Current liabilities are liabilities reasonably expected to come due within a year.
- Payables: Is the amount of money owed to suppliers and vendors for goods or services bought by the company also referred as accounts payable (A/P).
- Unearned Revenue: Revenue from a product or service that has yet to be delivered or performed.
- Accrued expenses: are the expenses incurred by the business for which there is no invoice, such as wages, employee benefits (e.g. medical insurance, retirement plan contributions) and federal and state taxes
- Short-term borrowing: Company credit card bills, lines of credit, etc.
Long-term/ Fixed Liabilities
- Mortgages: means borrowing to buy or build the company’s facilities (e.g. buildings, factories, etc.)
- Other loans: Includes for company vehicles, equipment purchases and loans from shareholders.
- Bonds: Debt instruments issued by the company to raise capital (this type of liability is unusual for a small business).
When you set up your account in QuickBooks, your opening balance equity will be recorded in the QuickBooks accounts. This balance is ‘fixed’ and remains the same throughout the life of the company. The profits accumulated throughout the life of the company are marked as retained earning on a QuickBooks balance sheet. The Net Income is calculated by adding any owner distributions to the profit and loss. The Profit and Loss must match according to the recording period.
Running a balance sheet is easy if you follow the correct process. Here are some steps that help you to do this in QuickBooks:
- In QuickBooks, go to the left-hand side menu.
- Access the Reports option.
- In Reports, go to the Business Overview section.
- Soon, you will be able to choose your balance sheet option.
- Change your balance sheet.
- You can customize the report by clicking on the Customize option.
- On the final report that you get on your screen.
- Choose an option from print, email, or export to get the balance report in a way that suits you best.
Steps to Create a Balance Sheet in QuickBooks
Here is a detailed guide to help you create a new balance sheet. Follow the steps below to know what to do in the sub-headings that you get in the process.
Step 1: Create a New Balance Sheet
Here are the steps to get started on QuickBooks Online. The steps are:
- Click on the left-hand side menu to see your sales, spending and profit reports.
- Further, choose the Business Overview option.
- On this page, click on the Balance sheet option.
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Step 2: Set Options for the Balance Sheet Report
Fill out the form and click on Run Report button. The information to fill is as follows:
- Report Period: On this page, you can choose the account years, fiscal year, and month to see your balance sheet. You can also specify a custom period of time by selecting the beginning and ending dates for your balance sheet.
- Display Columns by: The balance sheet can be condensed and set up to show all balances at the end of the accounting period. The change also allows separate balances in the balance sheet.
- Show Non-Zero or Active only: The balance sheet has rows and columns with specific uses. You can avoid unnecessary things on your balance sheet by knowing what each row and column is used for.
- Compare Another Period: You can add a column to the balance sheet that calculates the difference between the current balance and the prior balance. This can be in percentage or dollar form.
- Accounting Method: There are only two methods when it comes to accounting. One is the cash basis method and the other is a method called accrual based. The accrual based method involves accounts receivable and accounts payable. This type of accounting is recommended for managing balance sheets. The cash basis method is used for taxes purposes for small businesses.
- Run Report : When you are done with all the settings, click on the Run Report.
- Customize: Click on Customize to customize the balance sheet.
Step 3: Customize Your Balance Sheet Further
The balance sheet in QuickBooks Online is customizable when you click on the customized button. These customizations have 4 sections that are explained below for you to use accordingly.
- General: Choose the date range of the accounting period and choose the method used to count funds. Choose different formats on negative numbers while selecting the reporting time.
- Rows/Columns: You can easily make changes to the orders of columns to create a balance sheet. Columns that you want in your balance sheet are selected by checking the corresponding check box. The % balance can be found in the column’s header. Columns can be dragged up or down if you order them differently from the default layout.
- Filter: The balance sheet allows for five types of filters. They are customer, vendor, location, class and product/service. Location can be used to find the area that is helpful for running the balance sheet.
- Header/Footer: You can customize your company’s balance sheet by displaying information in the header or footer. You can choose where you want to display your tick marks, and you can change the report name if necessary.
Step 4: Print or Email Your Balance Sheet
There are three export options for your balance sheet: print, email, and download. At the top-right side of your report screen you’ll see icons that take you to the exporting options.
- Click on the Email icon to send a PDF file of the QuickBooks balance sheet report.
- Click on the Print icon to print your QuickBooks balance sheet report.
- Click on the Export drop-down icon to export your QuickBooks report in a PDF or Excel spreadsheet.
Creating a Balance Sheet QuickBooks
To create a balance sheet manually, use two columns for asset and liability entries of the items. When the sum of liabilities and owners’ equity are totaled, the amount should be equal to the total amount of assets in the left column. Accounts Receivable Journal Entry QuickBooks process explained step by step .
If you use a QuickBooks accounting software, you can generate a balance sheet automatically. You don’t have to enter items into categories, since the software does this for you based on information you have already entered into the system.
If you face any problem or have any technical or functional query which preparing QuickBooks Balance Sheet contact QuickBooks customer support without delay. The QuickBooks expert ProAdvisors provide you instant resolution so that you can resume your work hassle free. The Intuit certified ProAdvisors are approachable via various modes like phone support, email support, live chat etc. Sometimes due to some valid reasons you fail to reach the support professionals. In such scenario you can contact other reliable agencies.
Help for QuickBooks Balance Sheet
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Is it possible to go back and set up a depreciation schedule for my fixed asset accounts? using QuickBooks Essentials on a monthly subscription ,I’m assuming it’s the latest version as I pay a subscription fee
I need help in adding a total to the balance sheet. it is not an expense, i am guessing 2021
I’m helping a client transition from QB SE to QBO. Her main reason for the transition is she needs a balance sheet. But because QB SE has no balance sheet we are basically starting from scratch. I feel like I’m in over my head., I’d love to get your help but assume you will need to charge me. Correct? Can you tell me how you charge and give me an approximate amount?, Okay but before proceeding I need a little more info.
in 2010 I have a number of Undeposited Funds entries, even though all the payments were actually directly deposited into the bank account. I need to remove the UF entry from our Balance Sheet. Any help on how to do that in QBDT? using Desktop Pro 2019
I have one question relating to A/P situation that I see in the books that I am working on that has a negative balance on the B/S. This goes back to 2006! This was an overpayment to a vendor and the method for the “vendor with overpayment” seems like the solution. My question is should I use the 2006 date for the J/E and payment considering this is when it actually occurred or 12/31/2021 the date it is being corrected?
I am trying to run a standard balance sheet from 1/1/20- 12/31/20 but there is only a place to put one date