Thursday, June 26, 2008

Using Excel for Accounts and Bookkeeping

The great thing about MS Excel (and others say it’s greatest downfall) is that it is so adaptable and because it normally comes bundled with the PC you bought for your business, it’s cheaper than buying accounting software.

For start ups and possibly for the sole trader or small limited company, it’s a very easy way of keeping track of essential accounting information, especially if you have no intention of getting involved in double-entry bookkeeping (which will be the subject of a future post).

Excel also has very powerful capabilities, a whole range of financial and statistical functions, the ability to chart your data and analyse it in all manner of ways. For that reason, accountants (depending on their sector and job function) make very extensive use of excel.

Of course, Excel is also used where other applications would be better. As a business grows, it will (hopefully) outgrow the use of Excel for bookkeeping. Depending on the business, this could happen quite early on. Also, if your primary requirements are data storage, Access, being a database, handles data storage and retrieval much better than Excel.

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