Small-business liabilities are defined as your company’s debts, which means the exact amount of money owed to vendors, suppliers and creditors.

However, liabilities are further divided into current liabilities, which are debts your company plans to pay within 12 months, and long-term liabilities, which are debts your company plans to pay more than 12 months in the future.

After you add these two totals, you have the total debt for your company’s balance sheet.

Total Your Company’s Current Liabilities

Some of the common types of current liabilities to use in calculating a company's total debt are:

  • Accounts payable – amounts that your company owes to vendors.
  • Deferred revenues – prepaid services that your company will earn within 12 months.
  • Wages payable – amounts due to your employees and amounts due for payroll taxes.
  • Short-term notes – typically refer to loans that are due within 12 months.
  • Portion of long-term debt – Principal payments on long-term loans that are due within 12 months.

List each of these items on your balance sheet and categorize them as your company’s current liabilities. The sum of these items is the total of your company’s current liabilities.

For example, you may have $15,000 in accounts payable, $10,000 in deferred revenues, $50,000 in wages payable, $5,000 in short-term notes and $10,000 as a portion of long-term debt. Your total for current liabilities adds up to $90,000.

Total Your Company’s Long-Term Liabilities

Some of the common types of long-term liabilities to include in the calculation of a company's total debt are:

  • Bonds payable – cash interest payments for the life of the bonds issued by your company.
  • Long-term loans – includes mortgage loans and loans for equipment.
  • Capital leases – lease payments on your company’s long-term assets.
  • Pension liabilities – the amount of money due to your employees when they retire and the amount of money you have on hand to make those payments.
  • Deferred compensation – deferred payments for items such as retirement plans and stock options for your employees.
  • Deferred income taxes – taxes your company owes for tax deductions taken in previous years.

List each of these items on your balance sheet and categorize them as your company’s current long-term liabilities. Add these items together to determine the total of your company’s long-term liabilities.

For example, you may have $5,000 in bonds payable, $75,000 in long-term loans, $2,500 in capital leases, $50,000 in pension liabilities, $30,000 in deferred compensation and $5,000 in deferred income taxes. Your total for long-term liabilities adds up to $167,500.

Add Your Company's Current Liabilities and Long-Term Liabilities

To determine your company’s total debt, add the total for current liabilities and the total for long-term liabilities. This is your total debt.

Using the prior examples, you add $90,000 in current liabilities to $167,500 in long-term liabilities for a total debt of $257,500.