Why Not Use Spreadsheets for Accounting?

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Many small business owners use Microsoft Excel for bookkeeping. Maybe they think that because spreadsheets are perfect for numerical tasks, they can easily manage their business with them. They see videos on YouTube about how to manage accounts using excel spreadsheets and think that they are good to go.

But with changes in record keeping and tax submission rules, it is hard to cope with spreadsheets. Moreover, it is not only about rules! A lot of time and efforts and required to maintain excel sheets manually. Spreadsheets are prone to errors and need to be dealt with caution. With evolving business, people soon realize the risk associated with spreadsheets. Then they get confused about whether to continue using excel for accounts or not. Going on with spreadsheets can mess thing for you in the future. The only best solution to avoid any headache related to accounts is to use accounting software.

The following are the few reasons that explain why you should stop using spreadsheets for accounting right away.


Human errors – Entering data manually in the sheets and applying wrong formulas are the common human errors that can put you in huge trouble. Incorrect inputs can make it difficult for you to track and plan financial goals. Moreover, complicated formulas are hard to remember, and human error ought to occur. In reality, spreadsheets cannot understand accounting data like accounting software can. Software are designed to figure out errors in the entries and can prevent you from landing in major problems. Therefore, it is highly suggested to use accounting software instead of spreadsheets.

Backing up issues – If you rely on spreadsheets for backup and restoring data, things can become monotonous for you. Imagine the sudden crashing of computer and losing all the crucial spreadsheets where you have saved all your accounting data. It will be nothing less than a nightmare. On the other hand, if you use accounting software, you will not have to worry about taking backups. All your data will be secure.


Not accepted in the business world – You may use spreadsheets at an organization level, but on the whole, they are not accepted by the business world. It is because these spreadsheets can fail at any time. Moreover, it is not possible to perform functions on a large number of entries. Compiling financial statements, logging all the transactions in the general ledger can cause serious issues that businesses are mostly worried about.


You have to enter the same information repeatedly for invoices – When you use a spreadsheet for invoices, you have to enter the same information again and again to prepare different invoices. But, when you use accounting software, all the details of the clients are pre-stored. You just have to select the name of the client to prepare the invoice. Thus, your considerable amount of time is saved.


Lack of historical data – Using spreadsheets it is not easy to handle historical data. Spreadsheets are not made to deal with all the historical data and they take a lot of time to load if there is a huge amount of data stored in them. But, to keep track of financial trend, companies do need historical data and accounting software can help you with it.