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Accounting | How To

How to Create a Balance Sheet in QuickBooks Online

Updated October 26, 2021

Tim Yoder

WRITTEN BY: Tim Yoder

Published December 4, 2020

Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.

This article is part of a larger series on Accounting Software.

Learn More With Our QuickBooks Online Course
Explore the chapters in the guide.
  1. How to Set Up QuickBooks Online
  2. Part 1: Setting Up QuickBooks
    1. How to Set Up Company Information
    2. How to Customize Invoices, Sales Receipts & Estimates
    3. How to Set Up Invoices, Sales Receipts & Estimates
    4. How to Set Up Products and Services
    5. How to Set Up Messages
    6. How to Set Up Statements
    7. How to Set Up Expenses
    8. How to Set Up Advanced Settings
  3. Part 1: Setting Up QuickBooks (Cont.)
    1. How to Import Bank Transactions
    2. How to Import Credit Card Transactions
    3. How to Set Up Multiple Users
    4. How to Set Up the Chart of Accounts
    5. How to Set Up the Products and Services List
    6. How to Set Up Customers
    7. How to Set Up Vendors
  4. Part 2: Managing Sales and Income
    1. How to Create Estimates (Quotes or Bids)
    2. How to Create and Send Invoices
    3. How to Receive Payments
    4. How to Create & Send Sales Receipts
  5. Part 3: Managing Bills and Expenses
    1. How to Write & Print Checks
    2. How to Enter Bills
    3. How to Pay Bills
  6. Part 4: Managing Banking Transactions
    1. How to Enter Banking Transactions Manually
    2. How to Manage Downloaded Banking Transactions
    3. How to Record Bank Deposits
    4. How to Transfer Funds Between Bank Accounts
    5. How to Handle Bounced Checks From Customers
    6. How to Process Bank Reconciliation
  7. Part 5: Managing Business Credit Card Transactions
    1. How to Enter Business Credit Card Transactions Manually
    2. How to Manage Downloaded Business Credit Card Transactions
    3. How to Enter a Credit Card Refund
    4. How to Reconcile Business Credit Card Accounts
  8. Part 6: Managing Credit Card Sales
    1. How to Manage Credit Card Sales With QuickBooks Payments
    2. How to Manage Credit Card Sales With a Third-party Credit Card Processor
  9. Part 7: Set Up and Manage Payroll
    1. How Set Up and Run Payroll
    2. How to Manage Payroll Tax
    3. How to Add Historical Payroll Data
    4. How to Set Up Automatic Deposits
    5. How to Print Payroll Checks
    6. How to Run Payroll Reports
    7. How to Reconcile Payroll Liabilities
  10. Part 8: Reporting in QuickBooks Online
    1. How to Run a Profit and Loss Statement
    2. How to Run a Balance Sheet Report
    3. How to Run a Statement of Cash Flows
    4. How to Run an A/R Aging Report
    5. How to Run an A/P Aging Report

Quickbooks Online
In this tutorial, you’ll learn the steps to create a Balance Sheet in QuickBooks Online. The balance sheet is an important financial statement that is a snapshot of what your business owns and owes, usually at the end of an accounting period.

We’re excited you’ve decided to learn QuickBooks Online, our best overall pick for small business accounting software. To get the most from this tutorial, we hope you follow along in your own QuickBooks Online account. New subscribers can choose from a 30-day free trial or 50% off for three months.

Visit QuickBooks Online

This tutorial is one of our Free QuickBooks Tutorials. Below the video are step-by-step instructions with screenshots from the most recent version of QuickBooks Online.

What Is a Balance Sheet?

A Balance Sheet is a financial statement that summarizes everything your company owns and owes at the end of a period. The first section details what your company owns, known as the company’s assets. Assets include things like cash, bank accounts, accounts receivable (A/R), investments, inventory, buildings, and equipment. The value of the assets shown on the Balance Sheet is called their book value and is often different from the fair market value of the assets.

The second section of the Balance Sheet lists everything your company owes, known as liabilities. Your company’s liabilities are things like accounts payable, credit card debt, car loans, and mortgages. The last section of the Balance Sheet is your owner’s equity, which equals assets minus liabilities. Since the assets are not presented at their fair market value, the owner’s equity section should not be interpreted as the fair market value of the company.

Why Is the Balance Sheet Important?

The Balance Sheet is important because it gives insight into the net worth of your business. While most assets are not presented at their fair market value, the list of assets still provides considerable information about what your business owns and is the starting point for determining the fair market value of your company. The value of liabilities on the Balance Sheet is a good measure of what your company owes and is subtracted from your estimated fair market value of assets to determine your company’s net worth.

Example of the Components of the Balance Sheet

Below is an example of a Balance Sheet with descriptions of each of its components:

Example Balance Sheet in QuickBooks Online

Example Balance Sheet in QuickBooks Online.

Section A: Assets

Generally, Assets are items that your company owns plus amounts that people owe you. Accounts Receivable are invoices where you are waiting for payment from your customers. As you’ve learned in prior tutorials, Undeposited Funds is a clearing account used to group checks into a single bank deposit. Fixed Assets are buildings and equipment owned by your company.

Section B: Liabilities

Liabilities are amounts that you owe your vendors and creditors. Accounts Payable are outstanding invoices that you owe your vendors. While not shown in this example, any mortgages or equipment financing that the company is obligated to pay will also be listed in this section.

Section C: Equity

QuickBooks makes an entry to Opening Bal Equity when you create new accounts with a beginning balance. This should only occur when you initially set up your company, and the amount in Opening Bal Equity should not change after the initial set up.

Retained Earnings is the accumulation of profits within your company. Retained Earnings value on your Balance Sheet is the balance at the beginning of the reporting period. The Retained Earnings on your next Balance Sheet will be Retained Earnings from this Balance Sheet, plus Net Income from this Balance Sheet, less any owner distributions.

Net income shown on your balance sheet must match the net income from your Profit and Loss Report for the same reporting period.

How to Run a Balance Sheet in QuickBooks

You can run a QuickBooks Balance Sheet in four steps:

  1. Click Reports in the left menu and then select Balance Sheet in the Business overview section.
  2. View and change options for the Balance Sheet by scrolling up.
  3. Click Customize to customize the Balance Sheet further.
  4. Select an icon in the upper right corner of the report to Email, print, or export the Balance Sheet.

1. Create a New Balance Sheet

To create a new Balance Sheet in QuickBooks, choose Reports in the left menu bar and then click on Balance Sheet under Business overview:

New Balance Sheet in QuickBooks Online

Create a new Balance Sheet in QuickBooks Online.

2. Set Options for the Balance Sheet Report

Scroll up from the Balance Sheet to access basic options that can be changed for your report:

Basic Options for the QuickBooks Balance Sheet

Set basic options for the QuickBooks Balance Sheet Report.

Choose the following options for your Balance Sheet. You must click Run report (item F) before any changes are reflected in your Balance Sheet.

A. Report period: Choose the period of time for which you are preparing financial statements. You can click the drop-down box to choose a predefined period of time or enter the beginning and end dates for a custom period.

Choose a consistent report period: Since the net income in the equity section of your Balance Sheet should agree to the net income on your Profit and Loss statement, be sure to prepare both reports using the same reporting period.

B. Display columns by: By default, the balance sheet will have a single column for the balances at the end of the reporting period. You can choose to display additional columns for interim balances, such as quarterly, by clicking the drop-down box. You can also display additional columns to separate the balances by customer, vendors, classes, locations or other categories.

C. Show nonzero or active only: The default is to show only rows and columns that have activity during the period. This is a good setting that will avoid unnecessary clutter in your Balance Sheet.

D. Compare another period: You can include an additional column with the prior period Balance Sheet balances for comparison purposes. You can also add a column with the difference between the current and prior periods as either a dollar or percentage change.

E. Accounting method: Choose whether the Balance should be prepared on the cash or accrual basis of accounting. Accrual accounting includes accounts payable and accounts receivable. I recommend using an accrual-basis Balance Sheet for management purposes, even though most small businesses will have to print a cash-basis balance sheet for tax purposes.

F. Run report: Click Run report to apply your changes.

G. Customize: To customize your Balance Sheet further, click Customize.

H. Save Customization: Click Save Customization and name your report if you want to save your Balance Sheet settings. You’ll then be able to choose this customized Balance Sheet from the Reports tab.

3. Customize Your Balance Sheet Further

You can further customize your Balance Sheet by clicking the Customize button, which was item G in the prior section. The Customize report screen contains four sections: General, Rows/Columns, Filter, and Header/Footer.

General

The first section in the Customize report screen are general options:

General Balance Sheet Options in QuickBooks Online

General Balance Sheet Options in QuickBooks Online.

The Report period and Accounting method are the same options available in the prior section and should reflect any changes you made there. Unique options in this screen include the ability to report numbers in thousands of dollars, omit cents from your Balance Sheet, and choose a format for negative numbers.

Rows/Columns

In the Rows/Columns options, you can select columns to include and change the order of the columns:

Row/Columns Balance Sheet Options in QuickBooks Online

Row/Columns Balance Sheet Options in QuickBooks Online.

The % of Column is a nice option to analyze how your total assets are allocated among each asset account. You can reorder the columns by first selecting them and then clicking and dragging them up or down.

Filter

You can filter the Balance Sheet by five variables:

Filter Balance Sheet by Variables in QuickBooks Online

Filter Balance Sheet by variables in QuickBooks Online.

Running a Balance Sheet by location might be particularly useful, but only if you are diligent about including the location variable in all your transactions. If Location doesn’t appear in your Filter options, you need to turn on Location tracking in your advanced company settings.

Header/Footer

Lastly, you can choose what information to display in the header and footer of the Balance Sheet:

Header and Footer Balance Sheet Options in QuickBooks Online

Header and Footer Balance Sheet options in QuickBooks Online.

Place a checkmark next to any field you wish to appear on the Balance Sheet. You can also change the name of the company or report that will appear in the header.

Once you are done customizing your Balance Sheet Report, click the green Run Report button at the bottom of the list of customization options.

4. Print or Email Your Balance Sheet

You can print, email, or export your Balance Sheet using the icons in the top right corner of the report:

Email, Print, or Export Your Report in QuickBooks Online

Email, print, or export your report in QuickBooks Online.

  1. Email a PDF of your Balance sheet by clicking on the Email icon.
  2. Print a copy of your report by clicking on the printer icon.
  3. Export a PDF file or an Excel spreadsheet by clicking the drop-down arrow next to the export icon.

Wrap Up

Congratulations on completing another QuickBooks tutorial and learning how to create a Balance Sheet. Our next tutorial is How to Run a Statement of Cash Flow Report.

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About the Author

Tim Yoder

Find Timothy OnLinkedIn

Tim Yoder

Tim worked as a tax professional for BKD, LLP before returning to school and receiving his Ph.D. from Penn State. He then taught tax and accounting to undergraduate and graduate students as an assistant professor at both the University of Nebraska-Omaha and Mississippi State University. Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor for both the Online and Desktop products, as well as a CPA with 25 years of experience. He most recently spent two years as the accountant at a commercial roofing company utilizing QuickBooks Desktop to compile financials, job cost, and run payroll.

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