“I don’t need to incur any extra cost for accounting software so I’ll just stick to Excel” – said the business owner who lost hundreds of hours and thousands of unnecessary dollars.
That’s what JP Morgan also thought, before they announced they had lost more than 2 billion dollars on the capital markets back in May 2012. All because a single miscalculation was fed into other calculations. The compounding effect was massive.
For many small businesses, Microsoft Excel (or Google Sheets) is the default choice for bookkeeping
Let’s put this out there first: There’s nothing wrong with using Word or Excel to manage your business.
We’re all familiar with it so using Excel for accounting is the easiest, almost think-less decision for small business owners.
But because of this “obviousness”, we don’t see that it’s costing us very expensive dollars and hours.
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The Problem With Using Excel as an Accounting Spreadsheet
Excel is alright if you’re still in the startup phase, with hardly any transactions. It’s got simple worksheets to get you going.
However, you’ll slowly begin to discover a host of problems that can arise. There’s broken formulas, misplaced data, files disappearing and changes that cannot be undone or tracked.
Those are just problems relating to you handling the books.
Problems will extend to your business, so if you find yourself in this situations, it’s time to ask yourself the question: should you spend time and effort dealing with Excel for accounting and the risks associated with it?
Or should you transpose all of your business’s financial information into accounting software and let the system handle it all for you?
Here are five signs you should reconsider using Excel as your “accounting program”:
5 Signs Your Small Business Should Stop Using Excel for Invoicing and Accounting
You’ve sent an invoice with errors
Looking at the big picture, it really doesn’t make much of a difference. Just correct it when there’s an error. But there’s more at stake here. Your clients’ confidence in you, your time sucked up making changes, the delay in payment, that’s completely unnecessary.
Your documents have gotten lost or mixed up.
Last week’s reconciled books, if you forgot to duplicate it and started working on the old copy, it could be disastrous losing the paper trail. You’ll either have to do without one week’s reconciliation or undo everything and redo this week’s.
We tend to blame ourselves when things don’t pan out as they should. But before you start thinking “I’m no good at accounting”, consider if there’s a simpler way to do accounting.
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Cash flow issues are troubling you
Smart business owners know that they should be aware of their cash flow at any one point, be it right now or a few months down the road.
Fortunately, DashBod has a cash flow forecasting tool that you can use to analyse your funds. With one quick look, you can see everything that’s owed to the company, everything you owe and how to tide through.
If you’re one of those who check their emails and bank accounts every few hours hoping for a cheque to arrive, it’s time to bring your payment system up a level with cash flow forecasting.
You’re spending too much time accounting and invoicing
We all know the feeling of not being able to leave the desk until we remedy that ONE tiny mistake that’s making everything go wonky.
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How the Cloud Will Save Your Business
If you’ve decided to forgo the outdated accounting template known as the excel spreadsheet, you’ll want to consider switching to an all-in-one accounting program that’s built for the small business such as yourself.
With these tools your life would be so much better:
- Manage sales
- Track bills and expenses
- Visualise cash flow and project future earnings
- Professionals in the business world trust your reports
- Track inventory
- Easily reference historical data
- Get real-time updates and integration
- Run payroll
- Manage receipts
- Automate tedious accounting processes and get your life back
Accounting software may be a slightly higher investment than Excel, but it’s a small investment worth making for the future of your business. Try our free trial now.