Bookkeeping with Excel Templates: Pros & Cons

how to use excel for small business bookkeeping

Hardcoding a number means entering an actual number, not a formula, into a cell. The only numbers I hardcoded below are the $12 minimum wage and the monthly hours for each employee. Microsoft Word also has invoice templates, but I wouldn’t recommend using them because Word templates can’t do any arithmetic for you. Excel invoice templates automatically sum invoice line items, reducing the risk of human error.

For instance, bank statements usually list transactions in chronological order. However, this can be problematic as it doesn’t help you understand where your funds went that month. You should understand and appreciate how the use of MS Excel for small-business bookkeeping and accounting has changed over the last couple of years. It is not surprising to know that MS Excel continues to be among the most popular accounting tools that bookkeeping for small business small-business owners and finance managers use. Whenever you reimburse your employees for mileage or any other business expense, it is best to ask for receipts as well as an expense report to tally all costs in a single document. The benefit of using Excel is that you can use hundreds of convenient expense report templates for this purpose. You can store the data in different databases as well as file formats before importing.

Excel bookkeeping: How to do small business accounting in Excel

And that is not all; you can easily download more complex statement and budgeting templates from the Microsoft Office website. You also have the option to buy specialized templates from any third-party vendor and then install these in your application, which is convenient. We have gathered this valuable information from some of the most trusted and reliable sources.

  • Even better than the ‘what-if’ function is ‘forecast sheets’ which enable the users to estimate the upcoming trends by drawing upon historical data from over the past years.
  • We’ve compiled QuickBooks Tutorials that provide easy and helpful tips to help you make the most of it.
  • • Manually entering and categorizing transactions can be time-consuming, especially when you’re working with large amounts of data.
  • Balance sheets are all about demonstrating the “book value” of your company.
  • Chances are you already have access to the computer program.

It is less expensive because the excel spreadsheet is available on every computer/laptop; therefore, there isn’t any need to purchase any accounting software. Financial analysis doesn’t have to be a list of accounting ratios that assess your company’s profitability. If you’re a visual learner, use Excel to create pie charts that show where your business’s money is going. You don’t need to know how to set up macros to benefit from Excel’s functionality. As we’ll explore below, Excel remains one of the best ways to import large transaction datasets into your accounting software. Excel spreadsheets aren’t up to the task of creating a proper Cash Flow Statement that you can present to investors.

Cash flow statement templates

This is because you can pull sales data, invoices, and banking data from multiple sources into a single central workbook in order to support and streamline your accounting activities. The best thing about MS Excel is that it comes with various templates. You can use these templates to create budgets, profit-and-loss statements, and cash-flow statements. Did you know that the General Journal entries record individual financial transactions in chronological order as either debits or credits? You can directly enter these entries into an MS Excel worksheet or import them from any other application into Excel.

Also, when it comes to managing your data, and there are some primary cells in your spreadsheet that don’t need to be changed or modified by mistake, you can also protect these cells. You can also present your data and relevant accounting results conveniently in the form of pie and bar charts. You will be happy to know that it is a simple feature that even amateur accountants can learn. Using Excel, you can easily put both side by side and then quickly scrutinize any financial discrepancies. You will like performing bank reconciliation with Excel due to its no-frills interface.

How do I manage the bookkeeping for a small business?

Business planning is often used to secure funding, but plenty of business owners find writing a plan valuable, even if they never work with an investor. That’s why we put together a free business plan template to help you get started.

how to use excel for small business bookkeeping

An income statement template is a pre-designed template to help you record and summarize all of your team’s net income, net sales, and expenses during a given period of time. This simple but comprehensive template allows you to create a 12-month cash flow forecast for your small business.


Determining what accounting metrics you will need to include based on your small business is the first and most important step in setting up your bookkeeping process. Note that the next columns will mention each of the accounts that you will use during the year. With our easy-to-use Accounting Template, you can consolidate all the accounting information and workflows in your business to manage everything on a single dashboard. This empowers you with a bird’s-eye view of all your finances.

  • If total debits and credits don’t balance, check each journal entry and verify you posted the data to the general ledger correctly.
  • Many small businesses track who owes them and whom they owe with an Excel spreadsheet.
  • Every transaction you record gets sorted into one of these categories.
  • Simplified version to record your accounting data.Applying excel formulas can be nerve-wracking.
  • Gas mileage costs are 100% deductible, just be sure to hold on to all records and keep a log of your business miles (where you’re going and the purpose of the trip).
  • It makes your bookkeeping accurate, efficient with no additional manual efforts required.

As transaction receipts come in, record them on this sheet. For paper receipts, either keep them filed, either by date or alphabetically, or snap a photo of them and store them electronically with your other e-receipts. If you’re a small business that only needs basic bookkeeping, a free trial of accounting software should be more than enough to manage your needs. Conversely, double-entry bookkeeping is meant for larger, more intricate businesses, recording both the debit and credit side of each transaction.

Why’s built-in Accounting Template is the only template you’ll ever need

If you use Nearside’s Excel bookkeeping template, it will automatically pick the values and generate an income statement for you. Otherwise, you may need to manually record the same transactions in your profit and loss statement to generate the income statement. Anaging your day-to-day finances is one of the most important tasks of any small business.

Can Excel be used like QuickBooks?

It's inconvenient for accountants and bookkeepers to work with Excel. Often, they need to input Excel data into bookkeeping software like QuickBooks. It's not a tool for longterm accounting. While an Excel sheet can be incredibly useful for analyzing data, it's not a practical tool for ongoing use.

The foundation of solid business bookkeeping is effective and accurate expense tracking. It’s a crucial step that lets you monitor the growth of your business, build financial statements, keep track of deductible expenses, prepare tax returns, and legitimize your filings. Start by opening up a business checking account, followed by any savings accounts that will help you organize funds generated from cash flow and plan for taxes.

What does an accountant do for a small business?

Sometimes bookkeepers are wary about automation since they already have years of financial information in the books. But with bookkeeping software like Botkeeper, you can seamlessly integrate your existing software. We’ve compiled QuickBooks Tutorials that provide easy and helpful tips to help you make the most of it.

  • Keep records of every payment you make or that is made to you.
  • Use the far left-hand column for the date, and the column second to the left for the name of the vendor.
  • If your returns are recorded with misrepresented information, you may end up paying unnecessary fines, penalties, and get caught up in legal issues.
  • Business owners and accounting professionals use the data in the general ledger to create financial statements.
  • The accounting for FIFO inventory costs is much more complicated than average cost and I highly recommend you use specialized software to do it.

Use the ending balances in the general ledger to create the trial balance. It’s important to note the cash general ledger page only lists the cash portion of each journal entry. Journal entry No. 1 only lists the $10,000 reduction in cash. The inventory increase is listed in the inventory general ledger but not in the cash general ledger.

Ways to Use Excel for Small Business Accounting

Check its online features and bookkeeper services to ensure that the accounting software you choose suits your business style and your personal way of accounting. If you want to profit as a business, you are going to need to stay organized. You will need to know all the information on your business transactions, products, and services your business offers, as well as keeping track of expenses and revenue. This style of bookkeeping is designed to produce an income statement for a certain amount of time, recapping your income and expenses. In short, it helps you see whether your business is earning or losing money. The definition of single entry bookkeeping is a transaction that is entered once and either categorized as an expense/loss or as profit/income .

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