Let's see, you have a Wizard of Excel in the company that can cast VLOOKUP or some MACRO spells to magically generate the tables, figures and boom! You have a homemade 'accounting system'.
Surely excel can do a large number of tasks, it's easy to access and available in every PC. But, provided if you do not mind what I'm about the share:
Problems with excel for business accounting
You need skills Although excel is so common and widely used, many businesses forgets that besides data entry you actually required certain expertise or otherwise it'll be as difficult as learning a programming language. If you're not into numbers, learning excel can be quite difficult.
Difficult to track accounts
Updating a sales invoice is easy but what about the double entries? The excel does not automatically recognise double entries. I'm sure you can manage the basic sales and trade debtors double entries but if you have more than one sales account, it is difficult to track in detail. Instead of excel providing a better way to run your business, it often acts as a road-block to seeing the real picture.
Takes time to setup a good excel spreadsheet Setting up an excel spreadsheet that meets all of your financial needs requires a lot of thought and planning. It takes time to set up things like expense reports and invoice tracking. You may find yourself in a situation where you constantly need to add or change information on your spreadsheet.
You need a strategy before you start Besides skills, you need to know exactly what data is needed and how you are going to use the data before you start, as it is not flexible to configure it later. You need to know what you want to name the reports and the cells you want to print, ensure each report is properly time stamped, and make sure the formulas runs correctly.
There's no audit trail You probably know who is the last person to modify the spreadsheets. But what about last week, last month or a specific date and time on this particular data? Excel spreadsheets are susceptible to fraud because it’s easy to change information and hard to keep track of who’s making the changes. Imagine if your co-staff enters $1,000 instead of $100,000.
Why accounting software is better than excel
It is designed for accounting purpose With excel, you have to design your own processes which may or may not be optimal.
Accounting software is developed by professionals who understands accounting. With a small investment on money, you may find yourself more focus on growing the business instead of spending more time on making sure your excel is anywhere near to perfect.
Real-time and accurate data
Be it online or on-premises accounting software, your company’s financial data is updated in real-time and kept in one central place – in the cloud such as Quickbooks Online, Xero or have your own private cloud such as SQL Account and MYOB. You can issue a sales invoices and data will be updated to all related financial and GST report instantly – it’s automatic, and reduces the amount of data entry and potential mistakes. Financial information is always ready to share.
Easier tracking, informed decision making
Now you have all the data in one central place, you can perform searches within the accounting software with just a few clicks! You can easily tell when the invoices are paid, what is the history price you charge your client, how much this project costs you, what is the profit margin I can get from this selling price and many more. This is especially great when you need to make a business decision and decide what to take action.
Work simultaneously
Your accountant and operation staffs will be able to access the accounting software at the same time. With the right tools, they can have better efficiency and productivity to get the job done and grow your business rather than working out how to get the correct spreadsheets which may eat up time and cost you more. Accounting software comes with access rights control so you may allocate which areas the user access, are they allowed to change information without approval or can they view certain reports.
Clean audit trail
A proper audit trail feature ensures your data cannot be compromised. It records who creates, make changes in the accounting software and when they did it. Having a complete audit trail reassures the validity of the financial data, prevent fraud and employees dispute. And, if you get audited, you'll start out on the right foot with an approved accounting software.
Who's the winner?
Your business should be the winner. It can be tough at first but the potential reward is HUGE. Excel was simply not built to replace accounting software – so it’s time to give your business the room to grow and succeed, without restrictions.
We haven been continuously focus on setting up accounting software for business owners like yourself. Contact us at (65) 9720 6813 or email to carol.apscom@gmail.com for more information.