No matter what accounting software or tool you use, there is a universal agreement that you want something to monitor your business’ finances properly. Using spreadsheets correctly was an instrumental skill in the past. Spreadsheet Wizards helped you calculate any mathematical solution or equation you desired. The only issue is these are the ones who know how to work with spreadsheets. With changing times, many accounting software came into existence and changed the situation. With advanced accounting software, a newbie can also perform financial tasks. Presently, out of thousands of accounting solutions, Quickbooks has surpassed its predecessors. Today, we will make Quickbooks vs Excel comparisons.
Well, that’s a strange comparison because professional accountants and companies are using accounting software to make the business game stronger. Let’s understand the reasons behind this by making a detailed comparison of Quickbooks vs Excel for small businesses.
Excel: Is It An Accounting Software? Let’s Learn
Excel is not a kind of accounting software. But it entirely serves users with accounting. Developed in the 80s, Excel is basically a spreadsheet-type program. In the modern world, spreadsheet-based programs are not that easy to handle. They are actually outdated and can be a risk to your company.
Let’s get a clear idea by an example – an event in the US was allowed to accommodate a maximum of 5,000 spectators. However, 50000 spectators bought tickets. How did that happen? It happened because the staff member mistakenly entered “50,000” into the spreadsheet instead of “5,000”. Yes! It took one keystroke to turn things into a disaster.
Companies have lost millions due to minute errors in the spreadsheet. And that’s the issue with working with spreadsheets. Usually, they don’t assess or analyze. They will do only what you tell them. If you feed incorrect data then you will end up with invalid results that can cost you a lot.
Excel is basic, you can use it for tracking your finances only if your business involves selling stuff from its own basement. For a real business, does not matter small or medium, you need accounting software that is dedicated and powerful.
That does not mean spreadsheets are useless or unworthy. They also serve purposes, however, time is changing and business needs more.
Difficulties While Working on Excel for Accounting
When it comes to new business/startup, you will think to work on Excel or spreadsheets. That’s not a bad thing as a most small businesses do this in the initial period. But, when the business starts increasing you, have to make smart choices. Manually data entry can be tiresome as well prone to errors. Let’s highlight some important pointers of why Excel has become outdated for the present world’s accounting.
Today’s world is fast pacing world, where time is equal to money. Spending hours manually entering the company transaction data is a no-no. Moreover, it wastes your time that you can use in business strategy planning.
A small error also in Excel can cost your business time, money, and reputation. It will not only err your company’s balance sheet, but it will impact the entire cash flow chart also.
No historical Data
While bookkeeping, we all know saving the records is super important. Lacking historical data leads to legal complications. While summoning an audit no one wants to present an empty spreadsheet right? So, the fact is that, without historical data, you can’t properly make strategies.
Don’t Support Scaling
When you start any business, Excel might tempt you. However, when the company grows, your products, costs, planning, employees will also change. And, Excel can’t adjust to the changes that easily.
Todays’ world relies on the game of linking but excel is still manual-driven. You can’t integrate excel with bank accounts or any credit card. Even though banks give statements in the format of a spreadsheet, but still you have to rearrange and re-input them which takes time.
Advantages and Disadvantages – Quickbooks vs Excel
To understand the features of both let’s quickly run through the pros as well as cons of both Quickbooks vs Excel.
Excel for Accounting
|Simple data editing, no complex auditing wizards required.||The chances of committing calculation mistakes are high.|
|You can easily share the excel file with team members.||Applying excel formulas is nerve-wracking.|
|Easy version to record the data related to accounting.||Data in Excel can be easily changed or modified, causing legal issues.|
|The upgrade is not needed frequently apart only from its installation.||Also, the third party requires invoice creation which is not available.|
|Minimum upfront as well as processing costs.||Limited Space available.|
|Easy desktop.||Consumes a lot of time to accept the new changes.|
Quickbooks for Accounting
|Advised by accounting professionals.||Needs continuous upgrades for more users.|
|Integration with many applications.||Syncing problems while completing payments through cards.|
|Mobile app||No of business as well as industry-related features.|
|Cloud accounting.||Instability/system crashes.|
|Powerful business accounting services.||Limited users.|
|Easy interface.||File size problems.|
|Great payroll support.||Limited transactions.|
|Contacts records also.||Less invoicing tools.|
|Cash flow pages.||Prone to errors.|
|Customizable reports.||Sometimes software lags.|
Excel vs Quickbooks: Reasons to Prefer QuickBooks Software Over Excel
QuickBooks is developed entirely for helping businesses handle their finances appropriately. Moreover, it integrates safely with other apps such as like bank accounts and credit cards. Also, QuickBooks enables users to input financial records faster.
QuickBooks incorporates various helpful features developed to:
- Oversee expenses as well as sales.
- Manage income.
- Forecast as well as budget future earnings.
- Track daily transactions.
- Run payroll.
- Record inventory.
- Approve online payments.
- Scan receipts for managing expenses.
- Invoice customers.
- Also, supervise tax payments.
On the other hand, Excel needs you to input the correct formula in your spreadsheets. However, QB is built to serve all accounting purposes.
8 Benefits of Preferring Quickbooks for Accounting over Excel
1. Firstly, Quickbooks is uniquely designed by those who know to account. However, with Excel, you need to design a process on your own, which sometimes is not optimal.
2. Secondly, the software Quickbooks is capable of generating high-level reports such as profit and loss reports quickly. It helps entrepreneurs with their business planning. However, in Excel, you need to generate this report manually.
3. Thirdly, while working in Excel, making formula errors are normal but their results are disastrous. On the other hand, Quickbooks efficiently handles mathematical ensuring accurate reporting. Also, creating a master budget on Quickbooks vs Excel is different.
4. Additionally, Quickbooks also offers an audit trail to help users track who is making modifications in the books and at what time. However, Excel lacks electronic records.
5. With Quickbooks, it is easy to send invoices to your concerned clients. However, in Excel, you need to make a separate system for sharing, receiving, and solving any payment. You might like a comparison between Quickbooks vs Freshbooks Overview
6. Moreover, when you use Excel, it raises a normal question: who is the person owning the Spreadsheet? Is there a way through which you can know which document is updated? What if there are multiple people using the same spreadsheets at the same time? Excel needs you to email the latest version. However, Quickbooks enables you to sign in on multiple devices. It also allows the users to see the current numbers only.
7. With Quickbooks, you can use a smartphone or a tablet to work. Whereas with Excel, you have to stick with your system. And trust us, nobody wants that!
8. Lastly, when you need to outsource the accounting, then the accountant can efficiently work within Quickbooks rather than figuring it out from the Excel spreadsheet system!
To wind up the comparison battle between Quickbooks vs Excel, we believe it’s already clear that Quickbooks accounting software can simplify your bookkeeping and bookkeeping.
If your company is looking for something that is fast, error-free, grows with you, and boosts accuracy then QuickBooks software is the best. The fact is that the accounting software increases speed, which leads to growth. To manage bookkeeping in Excel vs Quickbooks, it is always preferred to use accounting software.
All in all, leave the old-fashioned spreadsheet in Excel and switch to the latest automated solution, Quickbooks. Do you think the same? Comment below.