Every business needs to have a proper bookkeeping system. A bookkeeping process involves recording, classifying and organising books of accounts. The books of accounts of a business need to be maintained accurately, chronologically and systemically. They form the basis of accounting and help the business to arrive at decisions for the future business and ascertain their profits.
The bookkeeper maintains the books of accounts. The bookkeeper maintains the journal, ledger and prepares the financial statements of a business. The bookkeeper used to maintain the books of accounts manually by recording transactions physically.
However, with the growth in technology, the books of accounts can be maintained through bookkeeping software, tally or excel sheets. The booking in excel can be done through maintaining excel sheets on Google excel sheets or Microsoft excel sheets.
The process of bookkeeping in excel sheets are as follows:
Templates created on the excel sheet will have cells for filing data and built-in formulas and macros to calculate the business transaction data. The formulas and macros help to record and calculate transactions. The bookkeeper can reuse the template with the formulas and macros every month, which saves the time and effort of the bookkeeper.
The bookkeeper can use built-in formulas and macros in the excel sheet for common calculations. However, the bookkeeper might have to create macros and formulas for the business transactions based on the requirements and add the bookkeeping/accounting formulas to maintain the books of accounts on the excel sheet.
Once the templates with the bookkeeping/accounting formulas are created, the bookkeeper can build upon the template to develop advanced versions for account-related tasks such as receipts, forms, invoices, basic financial statements and reports.
Bookkeeping in excel sheets is an easy way to maintain transactions. It does not require any special skill to maintain bookkeeping on excel sheets. It is helpful for businesses that are in the initial phase. However, maintaining a massive amount of transactions on the excel sheet of big businesses may be challenging.
Proper bookkeeping is crucial for businesses, involving recording and organizing accounts accurately. Bookkeepers maintain journals, ledgers, and financial statements manually or through software like Excel. Templates in Excel streamline the process with formulas and macros. While Excel is cost-effective and user-friendly, it lacks security and can be time-consuming for extensive data. Businesses must consider the advantages and disadvantages of utilizing Excel for bookkeeping needs.