Spreadsheet or accounting software?

​Why you Should Make the Switch ​​from Spreadsheets

​to Accounting Software

When you first started your business you probably set up an Excel spreadsheet to track your income and expenses. This is great for when you're beginning. It is simple and economical. But it is not a long term solution. Once your business has more than a handful of clients and your monthly transactions start to grow it's time to make the switch to accounting software like QuickBooks Online. Here are five signs it's time to make the switch:

1. You catch yourself making mistakes on your spreadsheet. We have all done it. We hit the wrong key or insert the wrong formula and instantly the spreadsheet is inaccurate. Because there is no easy way to reconcile it with your bank statement each month you may not even notice the errors. This can lead to compounding problems and headaches later. When you use accounting software you can link your bank account and do monthly reconciliations (or have your bookkeeper do them) ensuring your financial records are accurate all the time.
2. Your Excel spreadsheet is rarely up to date. You probably dread opening the file and neglect it for weeks. Unlike spreadsheets your accounting software receives real-time data from your bank meaning you’ll have up to date records with hardly any effort.
3. You need more detailed financial reports. All good accounting software options have built-in reports, which will give you insights into areas where you can improve your business finances. For example, a profit and loss statement will show you the income and expenses for a particular time period. By examining these reports you will be able to determine which service brings in the most money and which expenses you need to cut back on.
4. You want someone else to have access to your financial records (i.e. your tax accountant). Accessibility is limited when using a spreadsheet. You will likely have it stored on one computer. And even if you have it on Google Sheets you may not want an accountant to see certain parts of the spreadsheet (like where you're projecting income for next year or experimenting with different price points). When you use cloud-based accounting software you can login from your computer, smartphone, or tablet (or your grandma’s computer for that matter!). It also makes it easy to add other users (like a tax accountant or bookkeeper).
5. Your financial processes are scattered. You receive payments using PayPal, Square, Stripe, Dubsado and it's confusing! Sometimes invoices go unpaid because it's hard to track them. Expenses can go unrecorded because you pay them so many different ways its hard to remember to record them all. Accounting software consolidates tasks like invoicing, accepting payments, and tracking expenses into one place so you won't feel scattered anymore.

If you have reached the point where your spreadsheet system is more overwhelming than helpful and you aren't sure if it's accurate, it is time for you to find an accounting software that is right for you. I always recommend QuickBooks Online.  ​

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*This post contains affiliate links, but I only promote what I use!