Using technology for Bookkeeping
The existence of a long-term method of creating a workbook by hand disappeared, and started making a spreadsheet for budgets, cash flow, and various other accounting functions. The introduction of spreadsheets and computer accounting packages changed everything for the better. The accountants rationalize the spreadsheet to contain income and expenditure data to prepare the monthly profit and loss accounts for both large and small businesses.
The most popular spreadsheet program running under the Microsoft operating system is Excel, a sophisticated package for preparing the profit and loss account. The most important advantage of the Excel spreadsheet is to change the figures whenever you need.
Using spreadsheet
All spreadsheets are essentially the same—the origins of spreadsheets are data from the accountant’s paper with its lines and columns. The difference between manually kept calculations is that a spreadsheet is maintained on a computer the input by hand or transferred from some accounting packages.
Problems with spreadsheet bookkeeping
There will be a lot of work involved that you have to put everything into a spreadsheet, and there could be mistakes made quickly, and accuracy needs checking all the time. It becomes a very time-consuming task when you run your business independently because you also need to spend time learning.
When you do your bookkeeping work, you cannot email the entire spreadsheet to your client; besides client will not have the time to study and understand it.
Further, you cannot produce a spread to the banker if you need a bank loan. If you have many transactions, you need to create a couple of books to make all the entries, and at the yearend, your accountant will take a long time to reconcile with the bank statement. So, all that will create extra work and cost you more money.
Using technology for Bookkeeping
With a spreadsheet system, you will find it difficult to share information unless you sit next to the person doing the work to merge the files of each person into a single file. If not, you have to take more time to join the files to produce the final accounts.
If you use the laptop to do your work and want to take it somewhere else, you need to carry it wherever you go. That becomes additional work for you.
Small Business Bookkeeping in Excel
As Microsoft Excel is a program you likely already have on your computer, deciding to do your small business bookkeeping with Excel seems easy to set up. Moreover, manage your books, especially if you are starting and do not have the budget to spend on third-party software or bookkeeping professionals. As a spreadsheet-based program, I can use Excel for many purposes, including basic Bookkeeping and keeping accounts. However, it has limits, especially compared to a platform like QuickBooks or Xero Online.
On the other hand, as a start-up, you will not have many transactions to use a computer accounting package. Therefore this becomes cost-effective and easy to learn, and anyone could do it provided if knows to use a computer.