Accounting Program or Spreadsheet?  Which is Best?

Whether you’re a small business owner, freelancer, or keeping track of personal expenses, finding the right bookkeeping tool can make all the difference.   

Which one is the right one to use? You have a few options, I’ll break them down further for you to help with your decision. 

Benefits of spreadsheets: 

·        Easy to use – You don’t have to learn a new program. 

·        Cost effective –Accounting programs can be expensive. 

·        Customizable – Tailor the information to your needs. 

Negatives of using a spreadsheet for bookkeeping: 

·        Manual – Every transaction must be entered by hand.  

·        Time consuming - Entering every transaction by hand takes time away from other            areas of your business.  

·        Errors – Human entry leads to errors or miscalculations. 

·        Lack of Automation –Invoicing and receiving bills aren’t automatically sent to clients',            repeated transactions are not entered automatically. 

‍

Now let’s look at the benefits of accounting software: 

·        Link up to bank accounts – Automatically imports all transactions.  

·        Automatic entries -Deletes the need to manually enter. 

·        Efficient use of time-Because of automation, you save time.  

·        Reports – Easily produce financial reports. 

·        Ease of use – All major bookkeeping tasks such as reconciling accounts, tracking             assets and liabilities are easier to complete with an accounting program. 

‍

The downfall of accounting software: 

·        Complexity –Accounting programs require you to learn new software and have some            knowledge of bookkeeping. 

·        Cost – Most accounting programs charge a monthly fee and internet access is            needed to use most programs. 

 Both bookkeeping options have their benefits and drawbacks.  If you are a new business or don’t have many transactions, you can get away with using a spreadsheet.  I have created a Simple Profit & Loss spreadsheet if you are looking at using one   Once your transactions increase or become complicated you would benefit from looking into various accounting programs.  I prefer using either Xero or QuickBooks Online.

If you’re looking for more help, check out how we can work together here.

‍