As an entrepreneur, one thing you must stay on top of is your accounting and bookkeeping. In addition, keeping a watchful eye on your operation’s cash flow is key to success. In fact, negligence and unmonitored expenses are often the culprits of business dissolution. After all, little things add up and compound in time.
Thankfully, you can count on ever-reliable Excel or an Accounting software to make your record-keeping a breeze. These digital tools help you track your income and expenses. But which among the two is better? So, let’s dive deep below to see:
Is Excel Right for You?
Excel is an amazing fixture of the Microsoft Suite that has been there since time immemorial. Other free tools like WPS spreadsheets perform the same tasks for free. It is a great program for helping you record simple data. This tool also performs basic levels of accounting, which can be great if you’re just starting out. But you must make a chart of accounts and income statement sheets. If you don’t know how to do this, you can utilize free templates online and tailor them to your business needs.
However, Excel is only helpful up to a certain point. When your business grows and deals with multiple things, you may have difficulty tracking and monitoring more complex information. After all, you must manually plug your day-to-day transactions, which can inevitably lead to mistakes like wrong entries and formulas. This, in turn, can impact your productivity and profitability as it can be more time-consuming.
Besides spreadsheets being riddled with mistakes, it can be tedious to set up things like invoice tracking and expense reports. You may end up constantly changing information. To make things worse, Excel has no audit trail making it susceptible to fraud. Anyone can change an entry, and you won’t know who’s accountable. Besides, it is common to run into system overloads when you’re working with too many scripts. It also doesn’t integrate with other apps that help you run your business.
Is an Accounting Software Worth the Investment?
Though you need to pay fees to use an accounting software, it is worth every peso as it is more accurate and easier to use. It is scalable to meet your business concerns and provides access to many users who can be audited. Most of all, you can perform backups for peace of mind, and reporting can also be done easily without glitches. Look at why this digital solution provides more value than Excel:
1. Ease of Use
An accounting software comes with an easy user interface. There are no headaches when it comes to formulas and calculations. The well-organized dashboard and toolbar make it very easy for you to set things up and record transactions. This will give you the confidence to manage your business right off the bat. Then, when you have a clear picture of your finances, you don’t have to fret over making bad financial decisions.
2. Assure Data Accuracy
You can keep your company’s data in a central, secure place. On top of that, you can merge your bank statements into the software, making everything automatic. This reduces manual data entry and helps minimize mistakes.
3. Access Real-Time Reports
With a few simple clicks, you can view real-time reports when you need them. You don’t have to wait until the end of the month to see the results. These statements, like your budget, are easy to view. You can also share them seamlessly with your team.
4. Provides Updated Information
You can create the information easily with this tool. So in case, your investors need data, you can readily provide it. Apart from managing your finances well, this tool helps during tax season because you can readily share that info with your accountant.
5. Assures Clear Audit System
With this software, you know who changes what entry. The historical data are at your fingertips, so there is transparency. With the proper auditing system, you can feel at ease as your data will not be compromised. It will record every transaction from sales contracts to employee payments.
6. Syncs Well With Other Business Apps
One of the best features of an accounting software is that it can sync with other business apps to truly make your life easy. For example, you can sync the following:
- Inventory management
This saves you time and takes out the hassle of running your business.
7. Provides Data Access Anytime
With software, you can grant anyone access anytime. Thus, you can readily share your financial information with your team, investors, and accountant. It reduces the paper trail and the potential for mistakes.
What is the Best Choice?
Should you have the funds, getting an accounting software for your business will work better than Excel. Though you will be paying steeper fees to use the digital tool, the potential rewards are also greater. An accounting software gives your business more room to grow and succeed.
Of course, you must remember that software can only do so much. As the one at the helm, you must diligently stay on top of things to ensure that all transactions are monitored well. That being said, though you have software at your disposal, nothing can ever replace professional advice coming from a certified public accountant.
If you truly want accurate financial statements and projections, give our team a call. We offer free 30-minute consultations. We can take a look at your books, give recommendations, and ascertain that your business’s financial health stays in tip-top shape.