How to do accounting in an Excel sheet?
Bookkeeping in Excel sheet in brief
Bookkeeping in excel is about recording the financial data of your business like sales, expenses, and purchases in a well-built spreadsheet. You need multiple tabs to create and maintains records.
To be able to do your accounting successfully - by using an Excel sheet- you need to start with a template that includes: the categories, the transaction, and the income statement sheet. You will need to customize the template and save it to your computer, and then continuously make your daily tasks.
Doing your own bookkeeping in Excel sheet will take a lot of time and effort therefore, many businesses invest in bookkeeping or accounting software.
Small, big or tremendous? Well, it really doesn't matter. The more you know about your business the more adaptable you will be to the financial changes. An up-to-date, organized and well-managed accounting system is a good base for a successful business. The most important task is to manage a day-to-day booking to be able to keep up with the information.
However, firms may decide to give these tasks to a professional accountant or they use bookkeeping software. If you have or about to start your business you don't need such an investment. An excel based solution is just perfect for you.
Expenses, balance sheet, inventory, account payables. Does it ring a bell?
First of all, if you want to do your accounting you need to have basic knowledge. If you have never heard about these expressions, I strongly advise you to start from the very beginning. "There is no cooking without shopping."
Find the most important expressions in our accounting dictionary.
This is the simplest way to do your accounting. Excel is a very good solution for this. Single-entry bookkeeping means that you enter your transactions only once in a category, depending on if it is leaving your business like an expense or entering like an income. Once you are done, you will be able to use them to make your income statement. This will help you to have an overview of the revenues and expenses and show you how is your business: is it growing or losing money?
However, it is possible to make a double-entry-bookkeeping system in excel, it is not very recommended. It will be more complicated and the chance to make mistakes is way bigger. Do not forget that - based on research -more than 60% of all Excel data have mistakes in them. Later, when your business is growing you will probably need an accounting system to make your life easier.
What would it mean to do my accounting in excel sheet?
First of all, you need to reserve time in your weekly routine. Depending on your workflow you need to check your bank account and type each entry and output into the Excel sheet while not forgetting about the tickets you paid with cash. If you have all your spendings and incomes registered, you are ready. The most difficult part of this task is to be consecutive. Try to find the perfect day and time for this activity. You need to be precise and punctual.
How to start with the accounting in excel sheet?
Now that you have an overview of the topic, get started. If you have been using excel, there are ways to create your own bookkeeping sheet however we have one already made for you so why bother. Follow these steps for an efficient and fast way.
Download our pre-made free accounting excel sheet template - made by a professional accountant
Get familiar with the accounting excel sheet
This means that you have to understand the most necessary part and the 4W: What, Where, Why, When.
After you downloaded the free accounting excel sheet you need to open it and see the details.
At the bottom of the page, you will find 5 different sheets. The first one is called an introduction. The second sheet is the setup. You need to list all the incomes and expenses your business has (for more details read the following paragraph).
The thirds and the fourth sheets are for the incomes and expenses. It is very important to save the date and the amount in the appropriate currency and it is useful to give descriptions so it will be easier in the future to find something you need.
The fifth sheet is the abstract section where you line up all of your incomes and expenses together. This part will be very important because it is easy to spend more and then could lead to unexpected problems. This will always keep you updated about the financial state of your business.
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Customize your chart of accounts
The very first step should include the customization of your chart of accounts. For this please use the setup sheet.
List all of your expenses and incomes your business owns and an account type for each. Put these in the chart of accounts and use them as a reference to enter and categorize transactions later on.
Any account you use to track money coming into your business e.g:
- Sales revenue (any transaction sourced form selling products)
- Service revenue (any transaction sourced form selling services)
Any account you use to track money leaving your business e.g:
- Bank fees (fees from bank)
- Business meals (meals with clients)
- IT, printers, phones (investments)
- Insurances (accident, casco etc..)
- Marketing, advertisement
- Taxes (taxes paid by your business)
- Rental or Lease (rental for your office)
FYI: For each activity/business there is different kind of expenses and incomes. If you have a car rental company you will have different expenses than a restaurant or a coffee shop. You need to adapt the categories to be able to reap the benefits of doing your own bookkeeping.
What is an accounting software?
Accounting software is software made specifically to do bookkeeping.
There are different types of accounting software. The rule is: the bigger the company, the more features it needs therefore the more complex it is and the more expensive it is. If you are a very large company, you need SAP, Oracle, or Abacus.
If you are an association or a self-employed, EZYcount is made for you as it offers all the features you need without the complexity of an accounting software made for companies with 20 employees who has someone in that company that uses that software all day long.
Furthermore, the EZYcount pack is a powerful AI that helps you automate the booking entry that you input manually in Excel. Automation means less time and fewer errors.
If you have already spent some time looking for ideas to do your own accounting in software, you already better understand this topic. You will find yourself in a very comfortable position with accounting software. With EZYcount you have 2 weeks of a free trial. During this time you have a professional accountant who helps you to set up your profile and help you get started.
Download our free accounting excel sheet here:
We send you the document directly to your email address. You will receive it in a few seconds.
What kind of excel skills do I need?
"A basic knowledge is more than enough, since we prepared the sheets already for you. Take your time and you will see it is very easy."
For how long is it legal to I do my own accounting?
"Legally, you are allowed to do your accounting until your income reaches 500'000 CHF."
What is the most common mistake people to do when they are doing their own accounting?
"To be able to keep up with the tasks you need to register all your data daily. They let it pile up until the task is very time consuming and they get depressed by it just not doing."
Who should I turn if I have a question?
"Don't worry, if you are working with our EZYcount sheets do not hessite to contact us and we will do our best to help you out."