Photo courtesy of APO Bookkeeping
There is so much you can get from Excel spreadsheets, and no more! Don’t get me wrong, Microsoft’s Excel has its many purposes one of which is capturing information and making calculations including statistics with useful bars and graphs resulting in eye-catching, aesthetic presentations; however, it does not have the capacity to convert information from one report type to another, reconcile entries, or provide real-time bookkeeping and accounting stats, and therefore cannot provide the cross-reporting intelligence analysis that businesses need in order to facilitate strategic planning and make good business decisions. It is not enough to know how much profit has been made thus far for the current year, or how much your current expenses are; businesses must be able to look comprehensively at their business stance at any given moment, if being successful and staying in business for the long haul is their main goal.
Use an Integrated Financial Solution Software for All Your Business Accounting Needs
This is where cross-reporting, intuitive, integrated financial solutions software such as Intuit’s Software – QuickBooks, and Sage Peachtree come in. With an integrated financial solutions software, you enter the information once, and you get to use that same information in a variety of ways to pull insightful reports including, not only Cash Flow Analysis and Profit and Loss reports but also Previous Year Comparison Reports that can help you see where you have been, the strides you have taken, and how best you can improve your game plan moving forward. With Microsoft Excel, you will need to enter the information more than once – even if it means copying and pasting field items and re-configuring codes, it is very time consuming, non-productive, and limiting. According to Fran Burns – Contributor at CFO Tech Outlook, “It’s time to stop ignoring the ‘elephant in the room’ and focus on integrated solutions that enable one version of the truth.”
“The number one disadvantage of using Microsoft Excel for accounting is the lack of its ability to reconcile accounts, which is the most important aspect of accounting.” Eugénie M. Nugent
As a liaison working on the front line bridging the gap between many CPA’s, CFO’s and their clients, I have seen firsthand the dilemma they are faced with from clients who refuse to use anything other than Excel for their accounting, yet require accurate financial analysis and advice from their CPA’s and CFO’s based on the limited construct of Excel spreadsheets they have tabulated. As I have come to realize, many of these clients choose to stick with spreadsheets because they are intimidated by these software; even when they have delegated their bookkeeping, they feel a sense of not knowing what is going on behind the scene, and this unfamiliarity has kept many of them from stepping on board the integrated financial solutions software train. I have the responsibility to steer those clients to the right software, in order for them to be able to get what they need as far as their personal or business financial analysis – which their CPA will not be able to provide them with – if there financials aren’t compiled in a way such that relevant reports can be accessed and generated, and so I have developed one-on-one customized training modules for these business owners using QuickBooks, which has resulted in a paradigm shift.
Microsoft Excel is a multidimensional, multifaceted macro programming language software that has earned its place in the business world and the world in general; however, it is not an accounting software – was not designed with accounting in mind, and therefore should not be used as your main accounting tool. If you are a business owner who is serious about having the right information to help you make good business decisions, you must use an integrated financial solutions software for your accounting. If you must use Excel in your business reporting, use it to configure and house data that you have compiled using an integrated financial solution software.
You are absolutely right! My “bookkeeper” usually use Excel to do my books, but since she left and I got a new bookkeeper, I am suddenly getting so much insight via reports from the software she uses. I was missing out, but I didn’t know anything about bookkeeping or the software available to do bookkeeping. I encourage all business owners to get a professional bookkeeper to handle their bookkeeping, or have their bookkeeping processes setup on one of the available financial software by a professional, if they want to do their own bookkeeping – and can do it.
Thanks, for this very useful write-up!
You’re welcome Janice! Happy you are now getting the insight you need for your business. Not sure of your bookkeeper’s circumstance and why she left, but it has turned out to be a blessing in disguise for you. Isn’t it? Yes, yes indeed! Some aspects of the business are best left for the relevant professionals; however, with the basic knowledge of bookkeeping, a little time, and the right software to do it, any business owner can handle their own bookkeeping. Today’s software make it so much easier!
Great article! I was using microsoft excel back when I haven’t discover yet today’s accounting softwares. I found it very helpful too. Thanks for sharing this article.
I am also using microsoft excel for my business accounting back then. Now I switch to other software which is much better. I believe that if you want your business to succeed and to be able to manage it properly including the accounting. I think that you must explore other tools that can help you. Thanks for sharing this article.
I also think that there are a lot of accounting tools that can help in accounting. I believe that trying out new tools aside from microsoft excel will definitely help in finding the right accounting software for the business. Thanks for sharing this article.
Yes, I totally agree with what you said. I think that microsoft excel is a great tool yet there are still other CMS tool that can be used as well. This article is very informative and helpful. Thanks for sharing this article.
Great article! I think that microsoft excel is a great tool, yet there are still a lot of accounting software that is great to use for business accounting. Thanks for sharing this article. This is really helpful.