How to Create a Balance Sheet in QuickBooks Online | Dancing Numbers (2023)

Are you looking for the procedure to create a balance sheet in QuickBooks Online?

Here is the solution that helps you to create it with step-by-step procedure. In this article, you also get some information about the balance sheet in case you are totally new to it. If you know about the balance sheet, then process the solution steps to create the new balance sheet in the QuickBooks Online account.

Let’s get started!!

What is a Balance Sheet?

A balance sheet is the patriot of the financial statements that are issued by the company that shows the readers what a company owes and owns at the end of the financial year. The first section is known as assets that show what the company owns. The assets include bank accounts, accounts receivable, buildings, equipment, investments, cash, and inventory. It is also known as the book value of the company that is different from the fair market value of assets.

Another section is the liability in which you get to know about what the company owes. In this section, the things include a car loan, loan, the amount payable, mortgages, and credit card debt.

The last section in the balance sheet is about the owner’s equity that is equal to the assets minus liabilities (Equity = Assets – Liabilities). The Equity is not interpreted until you get the asset’s fair market value of the company.

Types of Balance Sheets

To understand your business assets and liabilities as of a specific date, use balance sheets. Depending on what the company wishes to publish, the type of balance sheet can change from time to time. The various balance sheet types are:

Report type Balance Sheets

The assets of the business are listed then followed by the liabilities and equity, in the report format of the Balance Sheet. Liabilities are subtracted from the assets and the bottom line of the data lists the equity, in a few cases of the report format.

Account type Balance Sheets

Assets are listed on the left side of the balance sheet in its simplest forms, and liabilities and equity are listed on the right. The total of these columns at the bottom will be equal after the accounts are balanced.

Comparative Balance Sheets

The most common kind of balance sheet is a comparative balance sheet. This is used to compare account balances from many points. The evaluation is simplified by comparing Balance Sheets. The end-of-year balances are compared side by side for better analysis when you want to compare the account information for three years. This kind of balance sheet helps in understanding if a company’s net worth has increased or decreased.

Classified Balance Sheets

The accounts are divided into subcategories and displayed in the categorized Balance Sheet. In the case of assets, they will be classified into three categories: current assets, such as cash and accounts receivable, and fixed assets, such as real estate and equipment.

Unclassified Balance Sheets

These sub-divisions are absent from unclassified balance sheets. This kind of balance sheet lists, major assets in order of liquidity with cash first, followed by a list of liabilities, starting with current accounts payable and going down in order of due dates.

Why the Balance Sheet is Important?

The balance sheet shows you the insights according to the business’s net worth. So the balance sheet is the most important thing. It also shows you the things clearly what you have or what you owe. Many of the assets are not presented according to their market price. The assets list gives you the information that can be used to determine the good market value of the company. It shows you the estimate by subtracting the company owes from the estimated fair assets market value. This gives you the net worth of your company.

Example of the Balance Sheet Components (Assets, Liabilities, Equity)

There are 3 components in the balance sheet. So the example for those 3 components are:

1. Assets:

The assets are the things that own by your company and also, the amounts that people owe you. In the QuickBooks balance sheet, the Accounts Receivable are those invoices that are not paid and waiting for payments that should be done by your customers. The undeposited funds are used to group checks into a single bank deposit and is categorized as a clearing account. The Fixed Assets in Assets section are the equipment and buildings that you owe for the organization.

2. Liability:

In the section of Liabilities there are the amounts that you owe to your creditors and vendors. The QuickBooks Accounts Payable are those invoices that are outstanding, you owe to the vendors. If you have any equipment or mortgages financing that is obligated by the company to pay also added in the Liability section.

3. Equity:

When the new account is created then an entry is done as the Opening Balance Equity into QuickBooks accounts. This entry is done with the beginning balance that you have invested into your company. This is not changeable after the setup. The accumulation profits done into your company are marked as the Retained Earning in QuickBooks balance sheet. This retained earnings is remains the same as the retained earnings on the next balance sheet of QuickBooks. Now, plus the net income and less any of the owner distributions. The Net Income must match the profit and loss report according to the reporting period.

How to Run a Balance Sheet in QuickBooks?

Running a balance sheet is easy if you do it the proper way. Here are the steps that help you to run your balance sheet in QuickBooks with the correct process. The steps are as follows:-

• In QuickBooks, go to the left side menu.
• Click on the Reports option.
• In Reports, go to the Business overview section.
• Then choose the option Balance Sheet.
• Scroll it up to view and change the options for your balance sheet.
• Then you have to customize the balance sheet by clicking on the Customize option.
• In the final report that you get on your screen.
• Choose an option from print, email, or export to get the QuickBooks balance sheet report in the way you want it to.

Steps to Create a Balance Sheet in QuickBooks Online

Detailed steps to create a new balance Sheet into your QuickBooks Online account. Follow the below-mentioned detailed steps 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 create a new balance sheet into your QuickBooks Online account. The steps are:

• Click on Reports from the left side menu.
• Further, choose the Business Overview option.
• Under this, click on the Balance sheet option.

Step 2: Set Options for the Balance Sheet Report

Fill in the information and then click on the Run Report button. The information to fill is as follows:

A. Report Period: In this, you have to select the time period according to the financial statements. You can also choose the period of time from the existing options by clicking on the drop-down arrow. For the custom period of time, mention the beginning and end time for your balance sheet.

B. Display Columns by: The balance sheet has only one column at the end of the accounting period for the balances. In this, choose the option to display balances like quarterly. The columns can be displayed additionally by vendors, locations, customers, classes, or more categories. This is done for displaying separate balances in the balance sheet.

C. Show Non-Zero or Active only: By default, the balance sheet shows you the rows and columns that are active or currently in use in this accounting period. This helps you to avoid any unnecessary things on your balance sheet.

D. Compare Another Period: The additional column can be included for the prior period balance sheet that is used for the comparisons. The column can also be added with the difference of prior or current period in the balance sheet. This can be in percentage or dollar form.

E. Accounting Method: In this, you have to select the accounting method as there are only two methods. The 2 methods are cash basis and accrual basis. The Accrual accounting method has Accounts receivable and Accounts payable. This method is recommended to use in the balance sheets for management purposes. The cash basis method is used by small businesses for tax purposes.

F. Run Report: When you are done with all the changes then click on the Run Report.

G. Customize: Click on Customize to customize the balance sheet.

H. Save Customization: To save your balance sheet settings click on the Save Customization option and then name the report. This customized balance sheet is saved, and you can find it in the Reports tab.

Step 3: Customize Your Balance Sheet Further

The balance sheet in QuickBooks Online can be customized when you click on the customized button. These customizations have 4 sections. Each section is explained here properly so that you can use it accordingly.

1. General: In this, there is a reporting period to select the date range. Then choose the accounting method that is Cash or Accrual basis. There are unique options on the screen that has the ability that omits cents, report the numbers in thousands of dollars from the balance sheet. Also, choose the format for negative numbers.

2. Rows/Columns: In this, you can easily change the orders of the columns. Tick mark the check boxes to select columns that you want to include in the balance sheet. You can calculate the total asses for each asset account by using the % of the column. Select the column and drag them up or down according to the order you want them in your balance sheet report.

3. Filter: There are five filters that can be applied to the balance sheet. These 5 filters are Customer, Vendor, Location, Class, and Product/Service. You can choose the location that is useful for running the balance sheet. You can also turn on the location to use it particularly.

4. Header/Footer: You can choose the information you want to display into the header and footer of the balance sheet. Tick mark the checkbox on the field you want to display on the balance sheet. The company name or the report name can also be changed.

5. When You are done with all this, click on the button Run Report that is green in color.

Step 4: Print or Email Your Balance Sheet

The balance sheet in QuickBooks that you are using can be exported, printed, or emailed. So it is up to you the way you want to have your balance sheet. There are icons on your report screen at the top right-side so that you can use them directly. These 3 things are done as:

• Click on the Email icon to send the QuickBooks balance sheet report as a PDF in the email.
• Click on the Print icon to print the copy of your QuickBooks balance sheet report.
• Click on the Export drop-down icon to export the QuickBooks balance sheet report in the form of a PDF or an Excel spreadsheet.

Above, you get to know about the balance sheet and how to create a balance sheet in QuickBooks online. This helps you to know the owes and owns of your company. Just get into the process and create the balance sheet properly. In case you are facing any problems then get in touch with QuickBooks helpdesk team. The team is here to help you all the time to assist you with all your problems.

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