Finance

Balance sheets: the basics

A balance sheet shows a summary of what your business owns or is owed (assets) and what it owes (liabilities) at a particular date.

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Limited companies and limited liability partnerships must produce a balance sheet as part of their annual accounts for submission to Companies House, HM Revenue & Customs and shareholders.

A balance sheet must include:

  • fixed assets - long-term possessions
  • current assets - short-term possessions
  • current liabilities - what the business owes and must repay in the short term
  • long-term liabilities - including owner's or shareholders' capital

A balance sheet can also be used as a tool to help you analyse and improve the management of your business, when:

  • making decisions about growth
  • valuing your business
  • preparing to request finance or investment.

You may want to ask for help from your accountant to pull this together. If you have accounting software, this may have functionality to help you create your balance sheet, if the figures in the system are up to date and correct.

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Find guidance on balance sheets on mygov.scot

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