For new business owners, it may seem like a simple spreadsheet is sufficient for tracking business expenses and profits. After all, the business isn’t very large yet, so there may not be a lot of accounting to do. However, in most cases, it’s going to be a much better idea for the business owner to go ahead and start using accounting software or working with an accounting firm to make sure everything is done properly.

There’s a Lot to Keep Track Of

Most business owners who start working with Accounting Firms will quickly realise that there’s a lot more to keep track of than they might have originally thought. This means they would end up needing far more than just a simple spreadsheet to keep track of everything. They’ll want to make sure they keep correct and detailed records to ensure they don’t miss anything, and that can be difficult to do with spreadsheets.

Careful Analyzation is Crucial for Businesses

Business owners must analyse the finances for their business on a regular basis to ensure they are bringing in enough money and to avoid spending too much. They’ll also need to make sure the money is going to the correct place and steer clear of late fees or other avoidable expenses. With a spreadsheet, it’s more difficult to analyse all of the financial data to keep an eye on everything. Software generally creates reports the business owner can use to analyse how the business is doing.

Errors Must be Caught and Corrected Quickly

Even small errors can make a huge difference and could make it look like the business has a lot more money than it actually does. With spreadsheets, information needs to be double-checked manually to minimise the potential for errors. Yet, they’re still possible and it might not be easy to find all of them before they cause issues. The software will have built-in protection against many types of common errors as well as ones that aren’t so common but still possible.

Account Books Need to be Balanced Regularly

It’s important to make sure the books are balanced on a regular basis. The business owners will need to make sure they have a way to do this. With a spreadsheet, they’ll have to make sure it balances manually. However, if the business owner has accounting software, it will balance the books automatically. The business owner can simply check at the end of every period to make sure everything balances.

Financial Statements Are Needed

Financial statements may be needed for a variety of different reasons. Each time, the business owner will need to prepare them. If they have a spreadsheet with their finances, they’re going to need to create their own financial statements every time. If they have software, however, they can usually have the financial statements created automatically for them. This is much easier and will end up saving them a lot of time in the long run.

While it is possible to create a simple spreadsheet to keep track of finances for a new small business, it’s not always practical. Instead, it’s going to be a much better idea for the business owner to look into accounting software or to work with an accounting firm. This will ensure everything is tracked properly and that they can access any documents they need quickly and easily.