Record Keeping When Starting a Business.

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The use of Excel and spreadsheets to keep your financial records  is a common practice that many new small-business owners implement.  You can find many tutorials and templates on Excel, making it easy and simple to record some accounting formulas, and keep track of your transactions to report your taxes.

Unfortunately as your business grows, keeping your records in Excel can turn into an impossible task that requires too much time. With time you will find yourself facing a few problems, like misplaced data, lost files or broken formulas, making it harder and difficult for you as days pass. 

Some of the major disadvantages that you will encounter when record keeping in Excel are:

  • The use of Excel or spreadsheets is not generally accepted to report your financial statements. 

  • The information you keep on your spreadsheets doesn't help you when you are trying to interpret your data. 

  • You can't integrate information to reduce the manual entry. 

  • It is hard to predict the flow of cash. 

  • Your spreadsheets will tend to be inconsistent if you have an error, making it harder to find the problem. 

  • As errors compound, your records will be inaccurate and unreliable.

Spreadsheets are very useful as a tool to create specific graphics or tables of contents to incorporate into your Financial Statements. Keep in mind that your business will need at a certain point the use of an accounting system to keep your records.


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Common DIY Bookkeeping Mistakes

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A One Person Business