Excel is an accountant's best friend for managing basic accounting tasks (such as balance sheets and ledgers). But, can Microsoft Excel still live up to the hype in a world of innovative technologies?
Yes, and it completely depends on the requirements of your accounting and finance firms.
Excel is the tool that you need to standardize the process of work and quickly complete the task.
Throughout this article, we will discuss the following points regarding the use of Excel in small businesses.
· Why do small businesses use Excel?
· What are the benefits and features of Excel?
Why do small businesses use Excel?
Using Excel for small-business accounting has changed considerably over the past few years, so before we dive into its features and benefits, it's important to comprehend how Excel's use has changed.
Small business finance managers continue using Excel as one of their most common accounting tools. Small businesses usually have fewer financial data and use less of it than large corporations, so Excel allows them to focus on basic accounting activities, such as budgeting and forecasting.
What are the benefits and features of Excel?
Analyze financial datasets:
This application helps you compare financial datasets like total accounts, payables, and receivables to calculate cash flow volume. Keeping track of recurring costs can give you a better idea of your business's finances. You can segment customers by size, location, or purchase to see which groups generate the most revenue.
Create customized reports:
Using template-based reports (including charts and tables) for tasks such as invoicing and estimating cash flow volumes. Customizations can be made to the reports as desired (such as adding multiple/different state sales tax rates) without requiring a new template.
Automated data entry:
Data entry is automated via macros in Excel (e.g., copying data from a primary source into a spreadsheet). It is possible, for example, to create a macro that will export invoice-related data from your CSV file and populate your Excel sheet with the applicable invoice management template.
Key Excel features for small-business accounting:
Based on the selection of cells in a table, pivot tables summarize complex datasets within Excel's "Insert" tab. Once filtered, the data within the pivot table can be viewed.
Excel's "What-if analysis" feature lets you forecast results by varying datasets within a formula. Find it under the "Data" menu. This feature lets users modify data without removing it from the main dataset and testing new results.
Using forecast sheets, users can forecast data trends based on historical values, which are available in the same menu as "what-if analysis". Instead of simply changing the value of a cell, a trend is predicted in a graphical format.
4 Recommendations for using Excel for small-business accounting
Consider these points if you use (or intend to use) Excel for accounting in your small business.
1. Ensure that Excel is the program you want. Do not forget that there are other accounting and spreadsheet options if this article is too complicated or not quite what you're looking for.
2. Learn about the templates offered by Microsoft. If you need an accounting or bookkeeping template, you can find them online by searching for Microsoft's offering. View Microsoft-customized Excel sheets here. You can easily customize the template according to your needs (e.g., estimating your budget monthly vs. quarterly, adding pivot tables, and including your logo).
3. Use online resources to guide you through the template-building process. Learn how to create and/or use a template from start to finish by viewing online articles and videos. In addition, Excel's interface will be explained, you'll learn additional functions you may want to use, and you'll have hands-on practice before using your data.
4. It is advisable to practice using Excel for accounting tasks, such as cash flow management, by learning from prefilled datasets. Practice makes perfect. Once your template is finalized, it is advisable to practice using it by bringing in prefilled datasets to ensure that you understand how it works before entering your data.
Are you already using Excel and want to upgrade your Excel working skills? You landed at the right platform. Here, we will provide you with the best ways to use Excel.