Both business and personal finance budgets contain a series of credits and debits that are totaled to arrive at a balance. Most individual and small-business accounts treat credits as an addition of funds and debits as a reduction. When the total debits exceed the dollar amount of credits added to the beginning balance, the final balance on the budget for the time period measured is negative. Negative balances can be shown within a check register, spreadsheet or an account book a few different ways.
Place a minus sign in front of a number to indicate a negative balance when writing.
Tap the minus sign key (-) on the number pad of your keyboard or the hyphen symbol on the number row to show a negative balance when typing numbers.
Enclose a negative balance within a set of parenthesis. Some accounting departments prefer this type of indication because it cannot be confused with the act of subtracting and remains consistent when a document is copied. It is advisable, but not necessary, to include a minus sign directly before the total and within the parenthesis to further demonstrate that the balance is negative.
Indicate a negative balance within a spreadsheet or text document for color viewing with the color red. You may also choose to include an additional distinguishing feature such as the minus sign or parenthesis to ensure that the total would still indicate a negative balance if your document was reproduced or printed without color.
After picking a method of indicating negative balances within a small-business or personal budget, everyone with account access should maintain this method to avoid confusion when another person reviews credit, debit and final balance data.
- After picking a method of indicating negative balances within a small-business or personal budget, everyone with account access should maintain this method to avoid confusion when another person reviews credit, debit and final balance data.
Ashley Mott has 12 years of small business management experience and a BSBA in accounting from Columbia. She is a full-time government and public safety reporter for Gannett.