Should I use Excel spreadsheets or bookkeeping software like Xero? The question every small business owner asks themselves at one point or another – especially if your business is growing.
In this blog, we’re lifting the lid on spreadsheets versus bookkeeping software – and everything you need to know about the two.
If bookkeeping isn’t your superpower or it just takes you too much time, and you’ve been wondering if you should make the move and upgrade from spreadsheets (Excel or Google spreadsheets) to a bookkeeping program like Xero, there’s never been a better time than now and this blog is for you!
What is bookkeeping software?
First thing’s first, it’s important to understand what bookkeeping software is, and it’s easily explained … It’s simply a program (usually with online access) that business owners and companies use to enter income and expenses, and track their finances.
An online program such as Xero is more efficient than a spreadsheet, as there are fewer mistakes than manual processing (even if you think a spreadsheet might be easier to use!).
Time poor and wearing all the hats? A great bookkeeper who uses bookkeeping software will help save time when it comes to your day-to-day bookkeeping and ongoing tasks with features such as automation, receipt storage and round-the-clock access to the platform and its support.
- Different bookkeeping software programs: Xero, Quickbooks and Myob are the most well known. But at Accounts All Sorted our preferred accounting software program is Xero. We specialise in Xero because we believe it’s the easiest option with the best features to help your small business grow and succeed.
How will bookkeeping software help your business?
Glad you asked! Bookkeeping software aims to make your job easier as a small business owner, and having a bookkeeper who specialises in a certain program, like we do with Xero, will give you access to important reports (think profit and loss, balance sheet and cash flow) and give you back many precious hours in your days, so you can work on your big vision.
Imagine if you could simply do a search in your bookkeeping program to determine your expenses for the last three months. Or understand your profit and loss report for the last month. Or determine your cash flow situation (and not just from your bank account).
The power is in the reporting and online software solutions, such as Xero, is where the magic happens.
Consider these business admin scenarios:
- DON’T: Search through your bank feeds for an invoice payment you made three months ago
- DO: Simply search your supplier’s invoices in Xero to see the payments made
{Time saved: 2 hours}
- DON’T: Go through your filing cabinet, emails or online folders to find a specific receipt for your tax
- DO: Search the name of the company and find it in Xero
{Time saved: 2-3 hours}
- DON’T: Print your monthly Excel spreadsheets to manually determine your year-on-year income, expenses and profit
- DO: Download a report in Xero
{Time saved: 4-6 hours}
And wouldn’t it be great if you could simply ask your bookkeeper to do these tasks for you?
That’s the joy of using an experienced bookkeeping firm like Accounts All Sorted that specialises in Xero. Think of how much more time you could have with your family or working on your business’s growth.
Bookkeeping software is especially helpful if you have a growing team of employees and you’re now doing payroll and super.
The pros and cons of using spreadsheets vs bookkeeping software Xero
When you’re making the decision to move from using Excel or Google spreadsheets to bookkeeping software programs like Xero, consider the pros and cons of each option, and always come back to the reason why you want to upgrade, often it will be about the amount of time you are spending on your bookkeeping tasks.
SPREADSHEETS FOR BUSINESS
Most businesses start out using bookkeeping and accounting spreadsheets to record their sales, income and expenses. But when it comes to business growth and results, you’ll need bookkeeping software.
Spreadsheet pros
- Free to use
- Can be used offline
Spreadsheet cons
- No audit history
- Data/formulas can be edited
- Formulas can be hard to create
- Complicated/hard to understand
- Can be long and lengthy
- Hard for someone else to understand
- No bank connection
- Manual entry of data (open to human error)
- Difficult to use on small devices such as your phone
- All data can be deleted or lost
- Incompatible versions
- Time-consuming
XERO FOR BUSINESS
Xero is a web-based bookkeeping system designed for small and growing businesses. If you’re ready to upgrade your bookkeeping tools, Xero is an ideal platform.
Xero Bookkeeping Pros
- Easy to access from anywhere
- Easy to set up
- No bookkeeping knowledge necessary to use
- Easy for your bookkeeper/accountant to access
- Audit history
- User friendly and can have multiple users
- Reporting is a breeze
- Connected to bank feeds (multiple if needed)
- Save bills and receipts
- Easy to invite multiple users to file
- Connected to ATO
- Safe and secure with two-step verification
- Upgrade as needed as your business grows
- One version that’s updated in real time
- Android and iPhone apps available
- Easy to download reports
Xero Bookkeeping Cons
- Cost involved (monthly or annual)
- Needs internet (no offline version)
Bookkeeping services for small businesses
If you are a sole trader or a business with employees and you’re ready to upgrade your bookkeeping to Xero, we can be your financial partner to help you with:
- Bookkeeping services Sydney: We take care of all your bookkeeping requirements so you can work on your business.
- Shared bookkeeping service: We work with you to ensure you remain compliant and up to date, and can also train you in using Xero.
- Catchup bookkeeping: Ideal for those who have fallen behind and need assistance in getting their books up to date.
Learn more about our bookkeeping services here, and if you need assistance, please get in touch and let’s have a chat to see how we can help
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