Every business needs to keep accurate and up to date records. As a professional bookkeeper, I have clients ask me this question quite regularly. Some use Excel, some use QuickBooks, which is better?
The answer really depends on how big your company is and how many transactions you process a month for bookkeeping.
Every business is a little different, but I can generalize them into two categories: those with a limited number of transactions per month and those with a lot of transactions per month.
Excel Good For Limited Transaction Businesses
A small home based business could get away with just using Excel. That is of course if your home based business has a small number of transactions.
This may come as a surprise, I use QuickBooks a lot, but I really believe that Excel has some advantages over QuickBooks.
- It’s easy to use and almost everyone has it.
- Numbers are easy to see and are right in front of you as you enter in the revenues and expenses.
- No need to know which forms do what and where
- No need to toggle back and forth to find the overall figures for the month
- Easy to use
- No additional training is necessary.
- More time consuming with increased number of transactions in hunting for “right” expense or customer.
- One error in figures will throw entire spreadsheet off
- Must remember correct formulas to get numbers you need
- Can quickly become unwieldy with even a moderate number of transactions
- Won’t produce financial statements like profit and loss and balance sheet
- Difficult to find duplicate or incorrect figures
QuickBooks More Suited for Established Businesses
As an experienced Quickbooks user, I prefer it to Excel and it certainly is powerful for simple accounting software. Not surprisingly, accountants use QuickBooks as well.
- Easy to use
- Gives financial statements like profit and loss and balance sheet at a few clicks of the mouse
- Able to do ‘old school’ accounting like journal entries
- Set up to reflect actual cheques and invoices
- Easy to find errors and correct them
- Easy to assign expense to proper accounts and customers
- Easy to track receivables
- Download bank transactions unlike Excel
- Easy to track payables and expenses
- Requires training
- Can be steep learning curve if unfamiliar with computers
- Not foolproof and still relies on accurate entries
- Need to use it regularly to reinforce training
- More time consuming than Excel if not using QuickBooks regularly.
- Payroll is extra and requires registration with CRA before using it
- Payroll takes 2 business days to setup as it sends a test transaction for $1
- Takes another 2 business days if you change banking information mid-way through the set up.
QuickBooks is becoming easier and easier to learn and use. Long gone are the days where one need a computer engineering degree to use.
Advances in technology have made it even easier to use not just Quickbooks, but computerized accounting in general.
No programming knowledge required and comes ready to use out of the box. This is the primary reason small business owners have chosen QuickBooks over Excel.
Mathew Jazenko is a professional bookkeeper who trains business owners on using QuickBooks. Contact Mathew today to get your business set up on QuickBooks. email@example.com or call <a href=”tel:2895001978”>(289) 500-1978</a>