If we could impart one reality to our small business clients, it’s this: if you’re not intimately in touch with your business’s financial health, you’re leaving money on the table. Period. It’s important to start using accounting software, such as QuickBooks, earlier in your business and move away from the Excel spreadsheets.
That’s why as accountants, we see ourselves as business “doctors,” monitoring the pulses of small businesses everywhere. We think it’s our responsibility to share some of the most common small business accounting habits (or, non-habits) that we see that hold entrepreneurs back. After all, we’ve noticed some patterns over the days, months, and years we’ve been working with new businesses!
Accounting with Excel is the wrong move.
A prominent accounting issue: using Excel to track expenses instead of an option like Quickbooks, Xero, Wave, or Kashoo.
As you can imagine, we’re in favor of you using accounting software because we know it’ll make your business game stronger. But before we compare and contrast Excel to Quickbooks or any other accounting software, we have a question for you:
If your car broke down tomorrow, would you call up your cousin, ask him to watch dozens of hours of YouTube videos, and try and revive the car as a team? Or would you call a mechanic — an expert — so you don’t have to reinvent the wheel (pun intended) yourself?
Mechanics fix cars. Accounting software improves your accounting.
Why accounting software beats Excel everytime
That said, let’s get detailed about what advantages accounting software has over Excel spreadsheet tracking. For the sake of brevity, we’re using Quickbooks as the example—but we also love the options mentioned above as they all offer these features too.
Here are the 8 advantages to using Quickbooks for accounting instead of Excel:
- Quickbooks is a system developed by those who understand accounting. With Excel you have to design your own process, which may or may not be optimal.
- Quickbooks can quickly generate helpful, high-level reports like a profit and loss sheet to help with business planning. If you use Excel, you’d have to generate this report by hand.
- When you use Excel, you might make formula errors. Quickbooks handles the mathematical backend for you, ensuring accurate reporting.
- Quickbooks offers an audit trail so you know who’s making changes to your books and when, while Excel is DIY and offers no electronic record.
- With Quickbooks, you can easily send electronic invoices to clients. If you use Excel, you’d have to create a separate system for sending, receiving, and resolving payments.
- If you use Excel, it begs the question: who owns the Master Spreadsheet? How do you know which version of the document is up-to-date? What if more than one person in your business needs to use it at one time? While Excel requires you to email the most recent version back and forth, Quickbooks allows you to easily sign in online between devices. It also lets you know the numbers you’re looking at are current.
- With an accounting system like Quickbooks, you can easily work on your accounting on the go using a tablet or a smartphone. With Excel? You’re chained to your computer. And none of us needs more of that.
- If you decide to outsource your accounting, your accountant will be much more efficient if he or she can work within Quickbooks versus having to figure out your homegrown Excel spreadsheet system!
Software leads to speed, and speed leads to growth. If you’d like to accelerate your accounting, fill out this form to chat with an accounting expert.