Should you spend money on an accounting system to keep track of your finances, or should you use a free option that may require more work on your part? This is a question that is almost always asked of me as small businesses are about to start. There are many options ranging from costly software with an abundance of features to simple spreadsheets. Finding out which route is right for your business can save you a lot of stress, especially when tax time comes.
From my time spent working with accounting software and knowledge of spreadsheets, I‘ve heard arguments both ways as to what is best for your business. But at the end of the day, I believe accounting software can be beneficial to every small business owner. Here’s why:
- Digital spreadsheets, like Excel, require knowledge of complex formulas which can make your records prone to errors. The right accounting software handles all the calculations for you, and does it properly.
- Simple spreadsheets are easy to alter, which can make you susceptible to fraud. Most accounting software keeps track of all changes and maintains an audit trail.
- Each income stream needs to be tracked separately. This means that as you start offering more services, the number of spreadsheets you have to maintain will increase, while accounting software usually does this for you automatically.
One of my favorite things about an accounting system is the ability to call a multitude of reports at any given time to see your business from many different angles. Most software options have built-in reports for income statements, balance sheets, specific vendors, sales item, and much more. Fundamentally, accounting software is built to ensure that you record your accounting data effectively with minimal mistakes and good auditing.
You still need to use your data properly and many accountants can better help you with your finances if you use a program they are familiar with. The Wyoming Small Business Development Center (SBDC) Network also offers no-cost, confidential assistance with bookkeeping and more.
Now, that doesn’t mean you have to buy the most expensive software out there. The Wyoming SBDC Network can help you find the software that works best for your business and budget and how to track your finances effectively — even if you decide an Excel worksheet is best for you. Get in contact with your local SBDC advisor today.
ABOUT THE AUTHOR:
Robert Condie is the Southwest Regional Director for the Wyoming Small Business Development Center Network. Rob is a QuickBooks certified Pro Advisor and can help in most all of the other well-known systems available. He received his Bachelor’s Degree in Accounting from Dixie State University and has two years of commercial lending experience as well as three years as a retail manager. In addition to his professional pursuits, Rob is an avid outdoorsman and loves spending time in the mountains or on the water. He also enjoys time spent with his four kids and wife doing just about anything.