QuickBooks Vs Excel: for your Small Business Bookkeeping

December 15, 2020

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Small business bookkeeping seems challenging initially for all small business owners. The first thought that comes to their mind is how to streamline the process. From accounting to finance management- things get complicated. That’s when the hunt for small accounting tools comes into the picture. When talking about small business bookkeeping, the eternal battle between the QuickBooks vs excel arrives.   

Contents

The Excel vs QuickBooks for small business: The Battle Begins

Why do you need accounting software?

1. Improves efficiency

2. Accounting Automation

3. Simplified tax filing

4. Protects you during an audit

5. Provides a running history of your business

Quickbooks vs Excel for small business: Which is More Convenient

Advantages and Disadvantages – Excel vs Quickbooks

Microsoft Excel for Accounting:

QuickBooks Accounting:

Best Time Saving Apps for QuickBooks

Conclusion

The Excel vs QuickBooks for small business: The Battle Begins

Before encapsulating the detailed information and beginning the battle between Excel vs Quickbooks, let’s dive into some basics about bookkeeping in general.

In a layman’s language, Bookkeeping is the process of recording and organizing your company’s financial data and accounting stats in the most efficient and coordinating system. 

By documenting the financial figures of the company, businessmen can easily estimate their profit numbers and can strategize effective target plans for their company’s future. The businessman can also overcome the unseen crisis by carefully keeping a check on the cash flow analytics. Not to forget, the person who manages your bookkeeping is called a bookkeeper. 

To be precise, bookkeeping comes with sending and receiving invoices, account management, taxation, leaving audit trails, managing expenses, and preparing financial statements. The word ‘bookkeeping’ is often misunderstood with the term ‘accounting’. The terms are related, but bookkeeping acts as a base for your accounting. Therefore, whatever data is collected during bookkeeping, will be analyzed while accounting.

These days businesses of all sizes including Small businesses need to update their company financial stats with a bookkeeping method. There are several small business accounting and bookkeeping solutions from the basic manual input method in Excel accounting to modern full-fledged accurate and automated bookkeeping solutions like Quickbooks.

Let us learn why you need accounting software to run your small business successfully. 

Why do you need accounting software?

Small business owners can fetch numerous benefits from accounting software. If you are still wondering whether to switch to accounting software or not, let’s make it easier for you. We have listed a few top benefits of using accounting software for your bookkeeping.

Top five ways accounting software can help your Small business to run smoothly and boost its financial numbers.

1. Improves efficiency

Often completing administrative duties consumes all your time leaving no room to operate your business efficiently. Accounting software will get you in and out of your books swiftly giving you ample time to strategize your profit game.

There are thousands of accounting software programs in the market that help you in getting started and completing your bookkeeping in simple steps. The software requires some basic business financial data inputs. And if you opt for a cloud accounting system, you can manage your bookkeeping from any corner of the world using a strong internet connection. Also, bookkeeping stacks all your financial data in one place, making it easier for you to tabulate, refer to past transactions, and make smart financial decisions for the company. You no longer have to dig up on your old paper files and spreadsheets for accumulating your financial data.

2. Accounting Automation

Automated Accounting software produces well-rehearsed accurate results like adding totals, generating invoices, and compiling bank statements with a breeze. The automated feature saves a lot of manual efforts used for inputs and calculations.

To err is human, and manual calculations are bound to have errors leading to mismatched balance sheets. However, automation takes charge of every single penny that enters and exits your business bank account from external transactions.

Read more: 10 Tips to Automate your Accounting System

3. Simplified tax filing

You can be charged a bumper while filing your taxes if your cash flow management has been managed in a disorganized and careless manner. Switching to new trends and investing in creative accounting software like QuickBooks would help you dodge that risk.

If your returns are recorded with misrepresented information, you may end up paying unnecessary fines, penalties, and get caught up in legal issues. In the case of Quickbooks accounting software, you can be assured of holding receipts of every transaction, with zero chances of misrecord sales.

In case your return makes it through the IRS with no discrepancies, disorganized books can still make a hole in your pocket. If your tax preparer charges on an hourly rate, you will pay for the extra hours spent cross-checking your records. (in excel)

Also, you can lessen the burden on your tax preparer by directly handing over the books to fill out the return. Sitting through paperwork and other relatives can be done in less time.

4. Protects you during an audit

Auditors check for the accuracy, consistency, and correctness in your books, and if you fail to provide accurate files, you could be fined. Automated accounting software rescues you from audit penalties.

Post auditing, the accounting software makes your accounting batch look organized and professional. If your books are inputted and calculated manually, it results in bigger audits, however, automated software leads to smaller audits irrespective of the business size. Also, the job gets easier for the auditor, he no longer has to audit the book line by line.

5. Provides a running history of your business

Accounting software records all your transaction data accurately, providing you a realistic mind frame of business goals. The analytics report gives you a practical idea to plan achievable goals. The historical data, past transactions saved in the accounting software gives you a better idea to fabricate your new profit targets easily.

For example, you might have set a goal to increase your sales. Suppose your target to sell 10% more products/services compared to last year. Referring to last year’s sales in your accounting software, you will know exactly what percentage of extra sales will yield you the target.

Organized records let you plan your business cash flow easily. When you have a track of income and expenses for a certain period, you can create your cash flow to further expand your business. This also lets you make smart business decisions. 

Quickbooks vs Excel for small business: Which is More Convenient 

Usually, when you opt for an accounting choice during your business steps in the world, it’s common to stumble upon Microsoft Excel or accounting Spreadsheets. Also, the Internet provides you with a plethora of ways of bookkeeping using Microsoft Excel. But as your business starts growing, you will be required to make smart business decisions, where manual data entry may seem tiresome and can act as a bumper. Let’s put some light on using Microsoft excel for accounting and why Excel is outdated for today’s accounting. That’s how you ‘ll understand the difference between excel vs quickbooks for small business.  

  • Time-eater: In this fast pacing world, where time is money, spending hours simply tabulating your business transaction data manually is a big no-no. You lack the precious time that requires you in business strategy making.

  • Error-prone: We all know that wherever manual efforts are concerned, a bundle of errors is termed normalcy. But the error in accounting spreadsheets can cost you big time. Not only will you err the balance sheet, but the whole cash flow chart will also pitch a hole leading to a great amount of mismanagement.

  • No historical data: While bookkeeping, it’s very important to save your records. Lacking historical data can cause legal complications as well. When you summon an audit you do not want your accounting spreadsheets to look empty right? Without historical data, strategizing becomes a task.

  • Do not support Scaling: MS Excel might feel like a candy ride when you first start your business, but as your business grows, your products, pricing, strategies, staff number will change. And your excel cannot adapt to changes easily. 

  • No Integration: These days where the entire population is relying on the linking game, your excel is still manual labor driven. You cannot integrate your spreadsheet with your credit cards and bank accounts. Banks do provide statements in a spreadsheet format, but you need to organize and re-input the same, which is time-consuming as well.

Advantages and Disadvantages – Excel vs Quickbooks

To revise the key features of the accounting methods better let’s quickly run through the advantages and disadvantages of both these accounting methods.

Microsoft Excel for Accounting:

Pros

Cons

Frequent Upgrade is not required apart from its core installation.
Easy editing of data, no extreme auditing brainers required.
Easy to share the excel file with your accounting team and staff members.
Minimum upfront and processing costs.
Simplified version to record your accounting data.

Applying excel formulas can be nerve-wracking.
The probability of making calculation mistakes is high.
Data in Excel can be easily changed or modified, causing legal and fraud issues.
Limited Space availableThird-party needs like invoice creation are not available.
Time-consuming to adapt to new changes.

QuickBooks Accounting:

Pros

Cons

The accounting data is in control of the user account, hence no version control issues.
The finest level of accounting and auditing possible.
Easily connect banking accounts, credit cards, and records.
User-friendly interface and dashboard for reporting.
Includes payroll systems for salary, invoice creation, superannuation, taxation, and calculating leave entitlements.

Deep-rooted learning of the software is required.
The software might require regular updates, to keep your accounts up to date.
The reporting systems might not seem flexible concerning your company’s needs.
You cannot use the same flow as any other accounting software.
Installation and Configuration might require skilled professionals to avoid any future issues.

Best Time Saving Apps for QuickBooks

There are hundreds of apps catering to ease your Quickbooks accounting and automating your bookkeeping more smoothly.

  • SaasAnt Transactions: Import any kind of excel or spreadsheet CSV files into Quickbooks easily with Saasant Transactions Importer.

  • PayTraQer: sync your transaction data from payment processors like Paypal, Stripe, and Square into Quickbooks in minutes.

Conclusion

To wind up the battle between quickbooks vs excel for small business, it’s already clear how the accounting software Quickbooks can ease your bookkeeping. It makes your bookkeeping accurate, efficient with no additional manual efforts required. Plus it leaves you with enough time to plan and strategize your financial growth better. Ditch the age-old technique of spreadsheet for accounting aka manual data entry in Excel and switch to modern automated bookkeeping solution, Quickbooks. We hope you got a solution for excel vs quickbooks for small business.

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