How to Do Small Business Bookkeeping in Excel: 5 Key Tips

The chart of accounts lists every account, assigns it a number, and lists the account’s description. Centerfield assigns account numbers in the 1000s for income accounts (for example, #1000 for sales revenue). By switching from Excel to QuickBooks Online, you’ll have the advantage of an automated cloud solution to streamline your small business accounting. You’ll be able to work with your accountant in real-time, ensuring that your finances are always in order and that you have access to expert guidance whenever needed. Try a 30-day trial today and see how QuickBooks Online can help you grow your small business. Now, if you don’t have it, it’s still pretty quick and easy to change your cells to the accounting format.

Outgrowing DIY bookkeeping in Excel

And while you may not be making more than $25 million annually now, the accrual accounting method is set up to grow as your business grows. what are retained earnings However, it requires more resources than cash-basis accounting and doesn’t give you a picture of how much money you actually have in your bank account at a given moment. If you adopt the accrual accounting method, it’s important to be extremely meticulous in your bookkeeping practices. Create an Excel template with an accounting format Excel provides for you and use it to generate the balance sheet each month. The journal includes the journal entry number, accounts, dollar sign amounts, and a description of each entry.

• Excel can be a valuable tool for businesses that are still in their initial growth phases.
• A Single entry system records only one side of the transaction, and the effect of these transactions goes to only one place.
• QuickBooks is also easier to use because you don’t need to create formulas to perform calculations and process data.
• In the meantime, you’ll still need to understand the accounting process and how you can complete each task using Excel accounting.
• We learn about prepping data for a table, converting the data to a table, and the benefits of a table.

The most useful formulas and formatting tricks in Excel

• All you need to do is fill out the yellow cells, and Excel will generate the table automatically.
• It allows you to easily track income and expenses, manage invoices and payments, reconcile bank accounts and more – all within one centralized system.
• This could be a manufacturing company buying a brake press for one of their factories.
• If you decide to create Excel templates from scratch, you’ll need to input the formulas manually or enter the numbers yourself, which increases the risk of errors.
• Credit card expenses should be tracked separately for easy reconciliation.
• Your income statement sheet contains information from your chart of accounts.

Apply consistent accounting number formatting to maintain uniformity and accuracy across all your accounting spreadsheets. We learn the basics of a pivot table, how to create a pivot, refresh and format. In 34 short lessons, learn how to use Excel for accounting like a pro, including how to import, clean, and validate data to ensure it’s free of errors.

📆 Date: May 3-4, 2025🕛 Time: 8:30-11:30 AM EST📍 Venue: OnlineInstructor: Dheeraj Vaidya, CFA, FRM

• In the single-entry bookkeeping system, transactions are recorded in a “cash book,” or a journal with columns with headings such as the date and description.
• She has ability to tailor the tone abs style to suit the audience while maintaining the integrity of legal information.
• In such cases, a double-entry bookkeeping system is necessary for tracking cash flow and reducing the possibility of fraud and errors.
• Centerfield assigns account numbers in the 1000s for income accounts (for example, #1000 for sales revenue).
• There is even an international championship for Microsoft Office applications.
• Put a unique code on each account to ease the tracking and auditing.
• Because they are exhausted via routine company operations within an accounting period.

If you’re already a small business owner or just starting your own business, you can save money by using Excel to create a bookkeeping system. Learn how to do small business bookkeeping in Excel like a professional, and get access to our free Google Sheets and Excel bookkeeping template for small businesses. With accounting software, you can process more transactions in less time. Make the switch to accounting software, so you’re ready to take on more business. Accounting software ensures that each accounting journal entry balances the formula and total debits and credits. Post debit entries on the left side of each accounting journal entry.

In this lesson, we calculate payments (PMT) using financial functions. In this lesson, we examine how to create a chart, chart elements, and format elements. Let’s look at how to use SUMFIS and COUNTIFS to calculate based on more than one criterion column and add numbers per month. In this lesson, we learn the basic uses of SUMIF() and COUNTIF(). How to group data, and add your own expandable and collapsible Accounting For Architects sections to hide and unhide portions of data.

• Cash accounting gives you a narrower, less accurate picture of your business finances than accrual accounting does, since you’re not tracking income and expenses as they occur.
• Since net income is calculated from all monthly revenue and expense transactions, you need a new sheet on the first day of each month.
• In order to set up your balance sheet in Excel, you will want to link the corresponding transactions to the correct category in your balance sheet.
• This is a reliable accounting software that can automate everyday tasks and minimize errors.
• Journal entry No. 1 only lists the $10,000 reduction (credit) in cash.

For example, a manufacturing company tracking cost of goods sold would want different revenue and expense accounts than a CPA firm offering bookkeeping services. Their balance sheet would also differ significantly depending on whether they are an asset-based or service-based business. There are two primary accounting methods that businesses use — cash accounting and accrual accounting. The bookkeeping services difference lies in when you record company revenue and expenses.

Input transactions into the corresponding accounts, use formulas to calculate totals, and generate reports to analyze financial data. In Excel, creating a single-entry bookkeeping system involves setting up different worksheets for each type of account. These fundamental elements serve as the foundation for accurately tracking your company’s financial statements and making informed decisions. A company’s general ledger is a record of every transaction it posts throughout its lifetime, including all journal entries. Business owners and accounting professionals use the data in the general ledger to create financial statements.