Before I start this blog post, I want you to know that I absolutely LOVE Spreadsheets. I like how you can literally break down anything that you’re working on in a spreadsheet to analyze and keep track of.
So with that being said, this is not a “bash Microsoft Excel” Blog post. This is a honest blog post that you should be aware of as an Entrepreneur when you decide to use Spreadsheets as your sole way of doing your Bookkeeping and recognizing when your Business has outgrown this system.
This is especially important if you are growing or planning to grow.
Spreadsheets can become tedious
Yes! I said it. Spreadsheets=Manual work. And if you’re growing and short on time, this may quickly become a nuisance.
You’ll have to enter things manually, keep track of every little detail and data upon data will start to pile. Over time, you may find it hard to keep everything sorted together.
You’ll likely have a spreadsheet for each year, maybe even each month. A spreadsheet for Budgets, a spreadsheet for your Financial Statements, not including Tax type Spreadsheets such as keeping up with your mileage or your Home Office Deduction. Your momentum to tracking your Business in Spreadsheets may sound great in the beginning, but is it sustainable?
Spreadsheet = Verification?
How can you be sure everything made it to your spreadsheet? What if you made a mistake and missed an expense or missed adding a sale? You have no ability to reconcile a Spreadsheet. How do you even know you made an error? Spreadsheets have no accountability. If you missed something, it has no way of letting you know.
Think of your Bookkeeping System as a History Book. It is there to show you a history of the financials of your Business. Not only is this handy for Tax time, but also if you’d like to purchase a Home, get a Business Loan (think SBA EIDL/PPP Loan) or reference anything in question. It may sound handy to do a spreadsheet when you only have a few transactions, but what about the future?
My opinion is to keep your goal in mind. If you went into Business for yourself to be Successful, spreadsheets should not be your Main Bookkeeping System. As much as I love them and even have a Bookkeeping Cheatsheet, I prefer my Clients to use them when they are in the very beginning of their Business or if they are doing a last minute clean up. Otherwise, there is no reason why you should not get a Bookkeeping Software Account. There are free and paid options to Bookkeeping Software with an option to meet your need no matter your budget. They will grow with you, they provide Accountability to make sure you did not miss anything and they provide a history book to your Business that may come in handy in the future.
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