QuickBooks Versus Excel for Small Business Bookkeeping
When starting bookkeeping in a small business, many business owners may debate the choice of QuickBooks versus Excel. For a new or small business, it may seem like Excel is a low-cost, easy way to stay on top of expenses, while QuickBooks typically involves a higher cost and requires more time to learn how the program works.
However, there are substantial differences between these two software programs. You should know the difference before you invest in a bookkeeping system for your new or small business.
Why QuickBooks versus Excel?
QuickBooks is designed explicitly for bookkeeping, whereas Excel is not. QuickBooks has been an industry leader in comprehensive accounting software for many years. The company makes regular updates and adapts to changes in the industry quickly.
We don’t recommend using an Excel tracking system on a long-term basis. While Excel may save a little money upfront on software fees, it can end up costing you money in the long run. Excel simply does not have the accounting-specific software capabilities of QuickBooks.
Of course, Excel may still play a role in your business, as many business owners use both programs for maximum benefit. You need to understand the pros and cons of each program and keep them in mind as you make decisions about your bookkeeping software.
Pros and cons of Excel
Some of the pros of Excel are people’s familiarity with the program and the ability to customize your spreadsheets and reports to fit exactly what you want to see.
Some of the cons are the limited features, the extra work required to create reports, and the risk of calculation errors if entering your own calculations to generate custom reports.
As discussed above, while you can use Excel for analyzing numbers, it is not an optimal bookkeeping program. Many people are familiar with it and, therefore, more comfortable using it. However, this is a situation where it might be best to step out of your comfort zone and recognize that doing your bookkeeping in Excel could negatively affect your bottom line.
Pros and cons of QuickBooks
When it comes to bookkeeping, QuickBooks is hard to beat. One of the biggest pros is that it’s built specifically for bookkeeping. It includes profit and loss reports, payroll options, vendor payments, and other features to help you run your business and stay on top of your financials more efficiently. These features can save significant time and help you make better business decisions.
Some of the cons for QuickBooks are the cost and the learning curve. While QuickBooks does cost more than Excel and can require a little more time to learn the program, it ultimately saves you both time and money.
Ultimately the Choice is Yours
As a business owner, your time is money. While bookkeeping is critical for your business, it needs to be an efficient process so you can focus on other tasks that help move your business forward. Using an outdated, manual method for bookkeeping wastes your valuable time. Subscription fees for the right software can yield enormous savings for a business because of the automation programs like QuickBooks have in place.
As with anything, business owners need to know the true value of their time and recognize when spending money on systems can save money. Do a complete analysis to see how much investing in that software benefits your business.
Not sure how to place a value on your time or determine which infrastructure investment is best?
Let’s chat. I offer a complimentary 30-minute consultation for anyone with questions about their bookkeeping.