QuickBooks vs Excel for Bookkeeping finances of a business in check, having proper tools can be the determining factors. Bookkeeping is a fundamental aspect of a successful business and deciding between two of the most popular choices QuickBooks vs Excel for Bookkeeping. Both tools are also extremely popular in the financial sector. QuickBooks is a specialist in bookkeeping software specially for accounting work. On the other hand, Excel is a spreadsheet utilized. Although not specifically designed to be an accounting application. Small businesses and freelancers often choose QuickBooks first to track their income and expenses.
What is QuickBooks?
QuickBooks is a powerful accounting software that enhances financial business tasks for the issuance of invoice and expense, keeping payroll details and calculating tax. It happens to be especially built for bookkeeping ensuring accurate financial track, reporting and compliance. It is used among small and medium sized businesses with various plans to suit diverse needs.
One of the most desirable aspects of QuickBooks is that it is automated. The program can automatically link with your bank account, monitor spending and produce reports with very little input by hand. QuickBooks also has a cloud-based option which means you can access your information at any time from anywhere.
What is Excel?
Excel is a versatile spreadsheet program that allows for a wide range of functions for simple data entry to complex calculations. Though it is not an accounting program. Excel has been used extensively by individuals and small businesses for basic bookkeeping tasks. Many people create their own financial tracking sheet, including income sheet, balance sheet and cashflow reports. One of the biggest advantages of using Excel is flexibility.
You can customize your sheets exactly how you want them and it is quite affordable particularly if you already have Microsoft Office access. You need to enter data, create calculations and check accounts by hand. There is no built-in automation and if something went wrong it might be difficult to detect.
Key features of QuickBooks vs Excel for Bookkeeping
Both QuickBook and Excel are good popular tools. Each tool has its own purpose and special features. There are some key features of QuickBooks vs Excel for Bookkeeping.
1. Easy to Use
QuickBooks: Specially designed specially for accounting tasks. QuickBooks boasts a user-friendly interface that includes pre-made templates for invoicing, payroll, tracking tax and more. It is simple enough for a beginner to use with little accounting knowledge.
Excel: Excel offers complete control with spreadsheet management but creating a bookkeeping system manually takes up lots of time. It involves a good knowledge of formulas and accounting functions.
2. Automation
QuickBooks: Streamline a lot of processes such as bank reconciliation, invoicing and financial reports. It is able to connect directly to your bank account and this saves time and minimizes errors.
Excel: Excel processes are all manual unless you have advanced formulas or macros. It does not integrate with your bank so you will have to enter the transactions manually or import the data manually.
3. Reporting
QuickBooks: Provide instant access to scores of reports such as profit and loss, balance sheet, sale summary and tax summaries. Reports can be customized and produced with minimal clicks.
Excel: Reports can be made but need to be constructed manually. Although you have more design flexibility. There is a time and knowledge factor in getting it set up.
4. Cost
QuickBooks: Monthly or yearly subscription. Varies by the feature you require.
Excel: Included in Microsoft Office, which is purchased outright or as a part of a subscription. If you already own it then there is no added expense to use it for bookkeeping.
5. Scalability
QuickBooks: Suitable for expanding businesses. As business grows, QuickBooks can process more complex transactions and link to other business tools.
Excel: More suitable for small scale bookkeeping. Excel spreadsheets become sluggish and more difficult to manage.
6. Accuracy and Error Reduction
QuickBooks: Reduce human mistakes through inbuilt checks, automation and notification. It is also important to make sure that your finances remain updated in real time.
Excel: Formulas and data entry mistakes are more likely to happen. There is no in-built tool to catch mistakes unless you make one yourself.
7. Compliance and Tax Support
QuickBooks: It assists taxes by keeping track of expenses you can deduct and generate tax reports. It also keeps up with new tax rules and laws.
Excel: Does not offer in-built tax features. You need to manually calculate tax figures.
Pros and Cons of QuickBooks vs Excel for Bookkeeping
There are some pros and cons of QuickBooks vs Excel for Bookkeeping.
QuickBooks: Pros
- QuickBooks is specially designed for bookkeeping and accounting. It has in-built features capability such as invoice, expenses monitoring, payroll and tax preparation.
- A lot of work in QuickBooks is done automated.
- QuickBooks can save hours as opposed to doing everything manually in Excel.
- With QuickBooks Online, you can view your books anywhere there is an internet connection.
- It creates financial reports with just a few clicks which is particularly useful at tax time.
QuickBooks: Cons
- QuickBooks has a monthly and yearly cost.
- It does take some training to utilize and it is particularly for an individual.
- It is rich in features and it can at times be less adaptable if you did like to create highly custom spreadsheet or reports.
Excel: Pros
- Excel is highly flexible. You can create your highly formula, create a custom report and format your spreadsheets.
- If you have Microsoft Office already like Google Sheets, there is no additional cost.
- If your business is small with minimum transactions, excel can be easy for managing finances.
- You have full control to manage your data which is favorable to individuals who prefer to create their own system.
Excel: Cons
- All work done in Excel must be manually entered data such as entering transactions and running reports.
- It has no built-in accounting features like bank feeds, automated invoice and payroll integration.
- In Excel, you are doing it all from scratch like minor errors in formulas and data entry can send your whole financial picture off track.
Conclusion
In Bookkeeping, QuickBooks vs Excel for Bookkeeping have their own advantages. QuickBooks is designed for financial purposes with in-built tools, automation and easy to use features that makes everything easier. Excel provides complete control and flexibility. It demands more work by hand and great care with details. QuickBooks is the way to go but if you are working with a limited budget or have a simple finances and Excel will provide comfort with managing it yourself.
