All entrepreneurs face the same initial impression that keeping their company’s books is difficult. If they’re thinking about it at all, it’s probably to figure out ways to make things easier. There are a lot of moving parts in accounting and financial management. Now comes the time to start looking for some compact accounting aids like Excel Transactions Importer Software. The age-old debate between QuickBooks and Excel for managing financial records in small businesses always arises.
The Problems With Using Excel As A Spreadsheet For Accounting
If you’re a small business owner, getting started with Excel is a good idea. It’s hard to get past the fact that free versions of Excel come with access to simple, editable worksheets. However, proprietors will quickly learn that other issues can develop, such as the potential for damaged calculations, missed information, and lost documents. The more time you spend in a spreadsheet, the more difficult it will be to keep your records in order, and the less time you will have to actually run your business. Here are some of Excel’s potential pitfalls that small business owners should be aware of.
It Lacks Wide Acceptance In The Corporate Community
Although Excel could be useful for your company, it is not widely used in the business community. There’s a chance that potential backers will balk at your plan to use it. Your bookkeeper or accountant will do the same. Data analysts that need to run pivot tables and crunch numbers might benefit from using Excel. Eventually, business owners who care about things like recording transactions in the general ledger and generating financial data like balance sheets, statements of income, and cash flow statements will run into issues.
It’s Hard To Picture Things
As was noted before, vast amounts of data benefit greatly from being presented in Excel. Unfortunately, it doesn’t help much when trying to make sense of the data. As a matter of fact, Excel’s ability to comprehend data is dependent on its visualization tools, such as tables and graphs. This might be helpful in other contexts, but commercial accounting is not one of them. Imagine that your company has a million dollars in annual sales. With so much information, it might be difficult to keep track of individual transactions in different ledgers, such as accounts receivable and accounts payable. A table in Excel cannot be expanded or contracted like it can in accounting software.
Insufficient Past Records
The inability to reliably maintain historical data is another weakness of Excel accounting spreadsheets. Microsoft does not intend for these spreadsheets to be used for archival purposes. When businesses lose track of their past records, it becomes more challenging to spot monetary patterns. Companies might benefit from forecasting and budgeting when financial trends are easily identifiable.
For instance, do you have an inflow of sales around December? You may want to hire temporary labor or increase production if this is the case. If you can’t spot patterns, you can miss out on profitable possibilities or even lose money. This is not only annoying, but it may also lead to legal trouble. Let’s say you get called in for an audit by the Internal Revenue Service, only to find out that the company’s standard spreadsheet no longer includes data from the year in question. In a nutshell, that is a major issue.
The Use Of Spreadsheets In Business Is Not Scalable
To get things going, Excel may be adequate. However, when your business expands, you may need to make adjustments, such as increasing prices, securing additional funding, introducing new items, or adding staff. Sooner or later, your company’s financial data will grow too fast for your spreadsheet to manage. It’s impossible to prevent every problem from occurring in the company. But you can tackle these problems by using Excel Transactions Importer Software.
Data Input by Hand
The retail price has no bearing on the true cost of a program like Excel. The time investment is crucial. This time is incalculable yet essential to your mental health. Unfortunately, Excel needs a significant time commitment. All of your company’s costs will have to be entered manually. According to the Generally Accepted Accounting Principles, all transactions must be recorded twice if double-entry bookkeeping is to be used. That’s twice as much keying in by hand. This necessitates hand-entered data for everything from account balances to expense reports. This is not only a time-consuming process, but it also raises the likelihood of making a mistake.
Before we wrap up this comparison of Quickbooks and Excel for small businesses, it should be evident that Quickbooks is the superior accounting software. In short, Excel Transactions Importer Software can streamline your bookkeeping processes without adding any unnecessary time or work on your part. And you may use that extra time to formulate a more thorough strategy for expanding your wealth. Instead of using Excel spreadsheets and entering data manually, you could use Quickbooks, an automated bookkeeping system. Please get in touch with the Saasant staff if you require any further information.