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“Accounting does not make corporate earnings or balance sheets more volatile. Accounting just increases the transparency of volatility in earnings.” - Diane Garnick
Having a clear idea of your accounts and finances is very important, especially if you’re running a business or working for yourself. There are plenty of accounting programs on the market like QuickBooks, EBP, etc. However, there is a solution that’s much cheaper and more readily available. If you’re looking for a way to track your finances and do your accounting, Excel from Microsoft is an excellent option.
So how can you use this software for accounting? Can you do your bookkeeping with this software?
In this article, we'll be looking at why you should choose Excel, how Excel templates can save you a lot of time, what Excel can do, and how to get started with Excel.
Why Choose Excel?
Would you like to start managing your accounts digitally?
Here are a few things you should know about Excel.
Excel can be a powerful tool when it comes to accounting. It comes as part of the Microsoft Office Suite and can be used by sole traders and business owners alike and can make accounting more simplified through the use of accounting templates, calculations, and automated tasks.
You can fully customise your spreadsheets and use calculations to save yourself a lot of time, which is one of the many reasons Excel is a powerful tool that a lot of professionals use.
There are also SaaS versions of Excel which allow you to collaborate with other users across several devices.
Most of the time, Excel is used for accounting. You can use it for:
- Expenses
- Balance sheets
- Losses
- Quotes
- Bookkeeping
- Invoices
- Financial management
- Sales reports
- Financial reporting
- Etc.
Microsoft Excel makes life easier for both sole traders and business owners.
Some already have a good idea of Excel works while others could do with learning more about it. Don’t hesitate to look for tips and advice to help you. From keyboard shortcuts to useful functions, you need to know how to use Excel effectively and once you know how it works, you’ll be able to do an awful lot with it.
Learn about the advantages of using Excel for accounting
How to Save Time with Excel Templates
When it comes to tips for using Excel, we can’t recommend using templates enough. Accounting with Excel is so much easier when you use templates as most of the work is already done for you.
There are tonnes available online and many available directly from Microsoft. Check out the template library for Excel and just search what you’re looking for.
You can also find templates on other sites. There are templates for things like:
- Expenses
- Balance sheets
- Budgeting
- Bookkeeping
- And much more!
Popular templates allow you to just fill in cells with your information. The spreadsheet will do the rest since all the calculations will be done in the spreadsheet, allowing business owners or sole traders to quickly see the state of their finances. Just make sure that you keep them up to date and they'll become a powerful tool for your business since budgeting, quotes, payments, and projections can all be done through templates.
Financial reporting is essential, especially if you own your own business and the right templates can make it less of a worry. They can also be incredibly useful when submitting tax returns as they can be used for all the calculations you need to do. Type in the numbers and the template will do the rest.
There are plenty of websites where you can get Excel templates. There are hundreds available for every situation.
Ready to download Excel templates for your business?
Check out the best Excel accounting templates
What Can Excel Do?
You’re probably wondering exactly how Excel can be useful. Here are some of the best things it can do.
Functions are what makes Excel so powerful as they allow you to do automate calculations. Here are the different types of things Excel’s functions can be used for:
- Maths and trigonometry
- Lookup and reference
- Finance
- Date and time
- Text
- Statistics
- Database management
- Engineering
- Presenting information
- Accounting
Of course, you don’t need to use all of these for your accounting or tax returns. The most common will probably be logic, lookup, date and time, and text functions. Most Excel users use logic in their calculations to compare data.
You can use functions like IF, AND, OR, and IFERROR to define conditions to be met and these functions can help you quickly find information across several spreadsheets.
Date and time functions like YEAR, MONTH, DAY, and WEEKNUM are also useful for navigating your financial records.
Finally, text functions can help you manage the text in your spreadsheets, which often accompany the numerical data.
Here are some other useful functions you can use:
- SUM
- SUMPRODUCT
- SUBTOTAL
- ROUND
- ROUNDUP
- PRODUCT
- TRUNC
- ABS
- POWER
- SQRT
Discover Excel's best features and functions
Start Accounting with Excel
When it comes to accounting with Excel, there are a few things you need to do to get started.
Firstly, learn about your legal obligations for your accounting. These may vary depending on your status and you need to make sure your bookkeeping is above board. Even if you feel like you have all the information you need, there may be other information you need to include from a legal standpoint. If you’re worried about it, you might want to get help from a professional accountant. However, that doesn’t mean you can’t manage your finances internally.
Let’s not forget that accounting can involve:
- Analysing transactions
- Keeping accounting records
- Preparing balance sheets
- Recording expenses
- Preparing financial reports
- Creating financial projections
Entrepreneurs and sole traders can always take courses to learn how to use Excel for accounting or learn from private tutors and most courses or training will also be counted as a business expense.
Learn how to start accounting with Excel
Hopefully, you found this article on using Excel for accounting useful and you can find out more about Excel in our other articles.
If you're interested in learning more about Excel, accounting, or finance, consider getting in touch with some of the talented and experienced private tutors on the Superprof website.
There are plenty of private tutors all over the country and around the world offering tutoring either face-to-face, online, or in groups. Since each type of tutoring comes with its advantages and disadvantages in terms of learning approach and cost, think carefully about which will be best for you and your goals.
Face-to-face tutoring allows the tutor to focus fully on their student and also allows them to tailor their lessons to the student. Of course, this bespoke service comes at a cost and one-on-one tutoring tends to be more expensive than the other types available. However, it's usually the most cost-effective since the tutor will spend every minute of every session working with their student.
Group tutorials are great for those on a budget as you can share the cost of the tutoring with the other students in attendance. While group tutoring isn't as tailored as one-on-one tutoring, it can be useful for those who learn well from their peers or prefer a more social atmosphere while they learn.
If you can't find any suitable or available tutors in your local area, you can always broaden your search to include online tutors. As long as you have a webcam and a decent internet connection, you can learn almost anything from private tutors all over the world. With academic subjects like economics and finance or computer-based subjects like IT and using Excel, online tutorials can be just as effective as face-to-face tutoring.
Don't forget that a lot of the tutors on Superprof also offer the first lesson or session for free. You can use these sessions to try out various tutors before deciding on the one that's right for you. Don't just contact every single tutor and arranging a free lesson, though.
We recommend thinking about what you're looking for in a tutor and only contacting those that meet your criteria. After all, you might be working with your tutor for a while so you must make the right choice when you pick them. They should specialise in exactly what you want to learn and be within your budget.
If you're not sure, remember that you can always check their qualifications and read reviews left by their other students on their profiles before you reach out to them to discuss tutoring.
Excel is a powerful tool and with the right tutor, you too can learn how to get the most out of it for your accounting.
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