Have you just started your business? Are you trying to figure out how to track your income and expenses? To save some money, many small businesses opt to use spreadsheets. While I applaud making financially sound decisions, this is not one I encourage. Using spreadsheets is prone to error. The beauty of spreadsheets is in the use of formulas for calculating. If you are new to spreadsheets these calculations could be set up incorrectly or they can be damaged and changed and links broken, resulting in inaccurate information. Spreadsheets usually require manual data input. This is also prone to human error. One extra zero typed at the end of a number could mean your business income or expenses are grossly overstated. Of course, this would require you to actually update your spreadsheet. Many DIYers who come to me for bookkeeping have started spreadsheets but never completed them. Incomplete information is not useful for tax purposes, business making decisions, or applying for loans.
As a business owner, you want no, you need, accurate information.
You should be able to use your numbers to make sound financial decisions. You cannot do that if your numbers are not accurate. For this reason, I always suggest using accounting software. While I do like QBO for most situations, it is not the end-all-be-all. Regardless of what accounting software you choose, be sure it has a reconciliation feature. This may be one of the key components missing from your spreadsheet. A reconciliation feature allows you to match each transaction in your accounting software to the transactions on your bank statement. This ensures each and every transaction is captured and is the correct amount. Another feature missing from spreadsheets is automation. Many accounting software platforms will connect directly to your bank, shaving minutes off the task of adding income and expenses to the register. As a business owner, you will be wearing many hats. Streamlined processes are essential. Take yourself and your business seriously and invest in accounting software.
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