Free balance sheet template for UK businesses

What is a balance sheet?

A balance sheet is a snapshot of a business on a single date, usually the last day of its financial year. It lists what the business owns, its assets, and what it owes, its liabilities. What is left over, the net assets, belongs to the owners, and the bottom half of the balance sheet shows how: for a company, the share capital and the profits kept in the business (the reserves); for a sole trader, the capital account. Because the bottom half is just another way of measuring the same figure, the two halves always agree.

The UK balance sheet format

UK small businesses almost always use the vertical layout, and so does the template:

Fixed assets
+ current assets
− creditors: amounts falling due within one year
= net current assets (liabilities)
= total assets less current liabilities
− creditors: amounts falling due after more than one year
− provisions for liabilities
= net assets

Capital and reserves = net assets

For a limited company those headings are set by the Small Companies Regulations 2008 (SI 2008/409, Schedule 1, Format 1): called up share capital not paid, fixed assets (intangible assets, tangible assets, investments), current assets (stocks, debtors, investments, cash at bank and in hand), prepayments and accrued income, creditors due within one year, net current assets (liabilities), total assets less current liabilities, creditors due after more than one year, provisions for liabilities, accruals and deferred income, and capital and reserves (called up share capital, share premium, revaluation reserve, other reserves and the profit and loss account). Prepayments can be shown within debtors, which is what most small companies do. A micro-entity uses the same main headings with fewer of the subheadings, under FRS 105, so a micro-entity balance sheet example shows single totals for fixed assets, current assets and each creditor heading; a small company reporting under FRS 102 Section 1A uses the full Format 1 balance sheet format.

Gov.uk says a micro-entity sends only its balance sheet, with less information, to Companies House. A company is a micro-entity if it meets two of: turnover of £1 million or less, a balance sheet total of £500,000 or less, and 10 employees or fewer; small companies have higher limits of £15 million, £7.5 million and 50 employees.

A balance sheet example

Here is a basic balance sheet example, a simple UK balance sheet example for a small business. Harbour Florists Ltd, an illustrative company, has this balance sheet at 31 March 2026, with the year before alongside. It is the worked example loaded in the template above, and it follows on from the same company’s profit and loss account.

The profit and loss reserve is where the two statements meet. It started the year at £24,375, the company made a profit after tax of £22,683, and it paid £18,000 of dividends, so it ends at £29,058. The corporation tax charge from the profit and loss account, £5,182, sits in creditors because it is not due until nine months and a day after the year end, and the bank loan is split between the £4,800 repayable this year and the £14,400 after that.

How to do a balance sheet, step by step

1. Start from the trial balance at the balance sheet date, after the year-end adjustments: depreciation, accruals, prepayments and the stock count.
2. Fixed assets. Equipment, vehicles, fixtures, property and intangibles, each at cost less accumulated depreciation (net book value).
3. Current assets. Closing stock, trade debtors, prepayments and other debtors, and cash at bank and in hand. An overdrawn bank account is a creditor, not negative cash.
4. Creditors. Split them: within one year (suppliers, accruals, VAT, PAYE and National Insurance, corporation tax, the overdraft, this year’s loan repayments) and after more than one year (the rest of any loans and finance).
5. Work down to net assets. Net current assets, then total assets less current liabilities, then less the long-term creditors and provisions.
6. Capital and reserves. Share capital, plus the profit and loss reserve brought forward, plus the year’s profit after tax, less dividends. For a sole trader, the capital account. Check it equals net assets.

A sole trader balance sheet

A sole trader’s balance sheet has the same top half. The bottom half is the capital account: what the owner has in the business. It starts with the capital at the beginning of the year, adds any capital introduced and the net profit from the profit and loss account, and takes off drawings:

Capital at the start of the year
+ capital introduced
+ net profit for the year
− drawings
= capital at the end of the year = net assets

In the sole trader example, Ashworth Joinery started the year with capital of £15,560, made a net profit of £38,620 and drew £34,400, leaving capital of £19,780, which is exactly its net assets: a van, tools, a little stock, debtors and cash, less what it owes suppliers and on the van finance. Choose Sole trader in the template to lay it out this way.

Why a balance sheet doesn’t balance

• The year’s profit is missing from the reserves or the capital account, or the profit from the wrong year is used. The difference equals the profit.
• Dividends or drawings are left out. The difference equals them.
• An item is in the wrong section, an overdraft entered as cash, a debtor as a creditor, or the director’s loan account on the wrong side. That doubles its effect, so the difference is exactly twice the item.
• A transposition. Two digits swapped makes a difference that divides exactly by nine.
• A balance missed or counted twice, often a savings account, the VAT or PAYE control account, or a loan not split between the two creditor headings.

When the difference is not zero, the template above runs these tests on your figures and tells you which item to look at first.

Reading a balance sheet

A few figures do most of the work. Net current assets show whether the short-term assets cover the short-term debts; the current ratio and quick ratio put that as a ratio, and the gearing ratio compares borrowing with the capital. Our gearing ratio calculator works all of them out from the balance sheet, and the debtor days calculator turns the debtors and creditors into the days customers take to pay and the days you take to pay suppliers.

Balance sheet vs profit and loss account

The difference between a balance sheet and a profit and loss account is time. The balance sheet shows the position on the last day; the profit and loss account (or profit and loss statement) shows how the year got there. A healthy profit with a shrinking cash balance usually means the money is tied up in stock or debtors, which only the balance sheet shows. Fill in the profit and loss template first, then carry the profit into this one.

A balance sheet template in Excel

The free balance sheet template for Excel, the balance sheet format in Excel for a limited company, and the sole trader version, have this year and last year side by side with the formulas in place:

Net current assets = SUM(current assets) − SUM(creditors due within one year)
Total assets less current liabilities = SUM(fixed assets) + net current assets
Net assets = total assets less current liabilities − SUM(creditors after one year) − provisions
Difference = net assets − capital and reserves (should be 0.00)

Fill in the shaded cells and the totals and the balance check work themselves out; filled with the worked example above, it doubles as an Excel balance sheet example to learn from. The files open in Excel, Google Sheets, Numbers and LibreOffice. If you fill the balance sheet on this page instead, the Excel download carries the same live formulas, so it works as next year’s template too.

Sources: the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008, Schedule 1, Part 1, Sections B and C, on legislation.gov.uk; gov.uk, accounts for micro-entities and small companies.