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. 

Single-Entry Bookkeeping

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. 

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.

Example for:

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:

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