July 16, 2024

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5 Techniques to Use Excel for Modest Small business Accounting

7 min read
5 Techniques to Use Excel for Modest Small business Accounting
5 Techniques to Use Excel for Modest Small business Accounting

Accountants are recognized for putting on pocket protectors and expending their times operating in Microsoft Excel. I can vouch for the latter stereotype.

a person sitting at a desk in front of a laptop computer: Businesswoman analyzing spreadsheets on computer

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Businesswoman analyzing spreadsheets on laptop

Quite a few tiny enterprises swear by Excel for all of their bookkeeping needs. Even though accounting software package has its place in each and every business enterprise, you can advantage from introducing Excel into your lifestyle.

3 benefits of utilizing Excel for accounting

Excel is a highly effective software that can support any person performing with quantities.

1. Streamlined details entry

I’m not getting something away from the relieve of use that is turn out to be conventional in smaller small business accounting software program, but you’d be hard-pressed to come across a application improved suited to mass details entry than Excel.

Excel energy buyers know that macros can churn out hrs of a human’s operate in moments. Enterprise proprietors can generate macros to automate responsibilities, such as formatting, filtering, and operating primary evaluation.

You never need to know how to established up macros to advantage from Excel’s functionality. As we’ll explore down below, Excel remains one particular of the best methods to import significant transaction datasets into your accounting program.

2. Visible fiscal assessment

Economical investigation does not have to be a listing of accounting ratios that assess your company’s profitability. If you’re a visible learner, use Excel to create pie charts that clearly show where your business’s money is heading.

Nonprofit annual reviews normally use visual aids to converse exactly where they shell out their money. For-gain providers may possibly prepare very similar studies when pitching buyers.

3. Effortless sharing

Excel is the common forex of accounting. When you want to share financial information with a financial institution or trader, you will want to mail them both a PDF or Excel file.

3 most valuable characteristics for Excel smaller company accounting

I could go on for eons about the Excel options that small firms can leverage for accounting. Here are my 3 favorites.

1. Templates

Microsoft has thousands of free of charge Excel templates on its internet site. Relatively than having to layout your have invoices and expenditure reviews from scratch, you can down load and tweak anyone else’s development.

Templates are useful for these who are not at ease navigating Excel or have not but aced Accounting 101. Building your have accounting templates requires 100% precision if one mobile isn’t doing work properly, you could wind up with faults in your accounting records. Templates are plug-and-participate in with pre-loaded formulation.

2. Formulas

Excel formulas appreciably pace up business enterprise expenditure monitoring and analysis.

Say you’re searching at the financial institution assertion underneath and want to know how a great deal the company spent on inventory purchases. Instead than adding up a checklist of the applicable fees using a calculator, you can use the “SUMIF” method, instructing it only to increase charges marked as stock buys.

table: An Excel spreadsheet shows a SUMIF formula.

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An Excel spreadsheet reveals a SUMIF method.

You can find the significant library of Excel functions by clicking on the components button at the best of any Excel website page. It will provide up a aspect panel the place you can search and understand how to use the function.

graphical user interface, table: A Microsoft Excel window with the formula button boxed in red.

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A Microsoft Excel window with the method button boxed in purple.

3. PivotTables

I have saved the best for last. PivotTables, the most effective Excel attribute, reorganizes data to existing it additional logically. Accountants use the instrument to approach bank statements and other financial knowledge.

For case in point, bank statements generally checklist transactions chronologically, which does not assist you fully grasp where your income went that thirty day period.

I made a PivotTable beneath to categorize cash flow and expenditures on the adjacent bank assertion. It collapsed the order and stock transactions into a single line to delineate how considerably the enterprise acquired in revenue and used on stock buys. The complete row displays the company’s web profits for the month.

graphical user interface, application, table, Excel: A PivotTable lists the categories in a bank statement.

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A PivotTable lists the types in a lender assertion.

The illustration exhibits just a month’s worth of transactions, but envision your spreadsheet lists of transactions for an full calendar year. You could use a PivotTable to independent your transactions by month to better fully grasp your company’s hard cash move. That would acquire hrs by hand, but it’s only times with PivotTables.

How to use Excel for your little small business accounting desires

Excel can assistance you with countless features of your small enterprise accounting. Here’s how I’ve employed Excel as an accountant.


Despite the fact that several accounting program platforms have budgeting functions, I’d pick out Excel each individual time.

Commence your small business spending budget by exporting an money assertion from your accounting application to Excel. Clear out the numbers and include columns for every single thirty day period of the time period for which you’re budgeting. Then start out coming into your budgeted quantities and voila! You have a funds.

As your business’s funds get more included, you can generate granular sub-budgets that roll up into your business’s grasp spending budget. Excel can deal with it.


If your accounting application doesn’t have an invoicing attribute, you can quickly generate specialist charges by Excel.

Microsoft Word also has invoice templates, but I wouldn’t endorse utilizing them for the reason that Phrase templates just cannot do any arithmetic for you. Excel bill templates mechanically sum invoice line products, lessening the chance of human error. You would not want to be accountable for underbilling a customer for the reason that of an arithmetic mistake.

Cost reviews

Each individual time you reimburse an personnel for mileage or a further business cost, you should talk to for receipts and an expense report that tallies all costs in 1 doc. There are hundreds of expenditure report templates to pick out from online.

Accounts receivable and accounts payable

Several modest corporations observe who owes them and whom they owe with an Excel spreadsheet.

Companies on the funds accounting system only record revenue and fees when money will come in or out. Excel is the fantastic repository for a record of excellent consumer invoices and your business’s unpaid costs given that they have no spot in your accounting data till dollars improvements fingers.

Accrual-basis corporations record receivables and payables in their accounting software when they generate earnings and incur charges, respectively. They should not require to keep track of their receivables and payables anyplace else.

Bank reconciliations

Financial institution reconciliations, one of the bookkeeping fundamental principles, evaluate your company’s accounting records with its lender statements. You can set both aspect by facet in Excel and promptly scrutinize any discrepancies.

Lots of accounting software program methods have financial institution reconciliation resources, but I want to use Excel to perform monthly reconciliations mainly because of its no-frills interface. Begin the financial institution reconciliation by downloading Excel variations of your company’s common ledger and financial institution assertion. Then, duplicate and paste the details into one particular spreadsheet and commence reconciling.

3 most effective procedures when working with Excel accounting software program

Stay clear of building extra do the job for by yourself by following these best tactics.

1. Let formulas do the do the job

The best assistance I have acquired about working with Excel for accounting is to prevent “hardcoding” numbers whenever probable.

Think about you’re creating your company’s budget for up coming yr. You prepare to shell out all workforce the point out bare minimum wage of $12 for each hour. You later on discover that the minimum wage is going up to $15 subsequent year. If you created the spending plan applying formulas the 1st time, this take care of must consider no much more than 30 seconds.

Hardcoding a selection implies entering an real selection, not a components, into a cell. The only figures I hardcoded underneath are the $12 minimum wage and the every month hours for each individual employee. Formulas calculate the employees’ every month gross pay.

graphical user interface, application, table, Excel: A payroll budget shows an employee’s monthly hours multiplied by the minimum wage.

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A payroll budget displays an employee’s every month several hours multiplied by the bare minimum wage.

Bridget’s month to month pay back is calculated by multiplying her regular monthly several hours by the state least wage. Experienced I separately multiplied 12 and 30 in just about every mobile, I would have to redo the whole payroll spending plan. Many thanks to the formulation, I can simply just improve the 12 to a 15, and all the month-to-month payroll quantities will routinely update.

A bonus suggestion: The greenback indications in the formula “lock” the row and column you are referencing, so if you duplicate and paste the components from one particular cell to a further, it will continue on to reference the very same location alternatively of changing for the new cell’s area.

2. Save Excel accounting files securely

Any where you store economical details ought to be secured by a password that only a privileged few know. Password-guard Excel data files with delicate details, these types of as worker Social Stability figures.

Really do not forget to back up data files that are not saved in a cloud storage system.

3. Create template documents

Help you save your bill and expenditure report templates as template files. When you open a template file, it creates a new doc that will not overwrite the original template.

After you down load and tweak your expenditure report template, click on “Save As Template” and help you save it to an available spot for you and your workers. Any time a person clicks on the template file, you can be sure they won’t inadvertently spoil all your tricky get the job done in producing it.

Excel with Excel

Excel can be daunting at initially, but the sensation fades speedily. It’s like conference your in-legislation for the initially time (ideally).

Start out exploring Excel’s capabilities by downloading an cost report or bill template and tweaking it to match your small business. Shortly more than enough, you’ll achieve the know-how to put into practice it more greatly in your company.

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