Microsoft Excel is one popular Windows application that is used in different businesses. Most small businesses start using excel in their bookkeeping and accounting records. It is equipped with certain features that help the business generate reports, computation and recording. However, it is not a perfect tool for bookkeeping because of its limitation. We listed below five disadvantages of using Excel on your bookkeeping.
1. It is not free.
Just like any other software, you need to pay before you can successfully use the software. Excel comes with the Microsoft Office suite, together with other apps. You need to subscribe in order for you to use their services. The cost will also increase as you need more user licenses. It will definitely chop off a significant amount of your budget if ever you want to pursue using Excel for your business.
2. It does not use advanced programming.
Excel comes to you clean and empty. There is no pre-installed bookkeeping or accounting programs or functions. Thus, you will need to do all your reports with a blank sheet of paper. You really need to build your template if you want to create a uniform report. It will take you time because you need to set up all the formulas in order successfully generate results. Also, you might need experts if you prefer to use it extensively since it requires codes.
3. It is time-consuming.
It was mentioned above that there is no template available for Excel. Therefore, you need to allocate a certain time so that you can create your books, encode the data, and design formula and formatting. It can be a stressful task since you cannot move forward if it is not finished. This might work for small businesses with smaller enterprise and with manageable transactions. However, it cannot sustain large businesses.
4. It has few audit controls.
It is a disadvantage for Excel since you cannot track any changes you made on it. You cannot also track when the change was made or who made the change. In a business, it is important that there is a record that shows any changes within the document so that you can properly address persons in contact whenever inconsistencies arise. Although it has a feature of view and edit-protected, this is only beneficial if you are the only one working on this file. If you need to collaborate work with more people, you will be needing a more sophisticated application that can handle the workload.
5. It is prone to manual errors.
Manual labour, most especially if you are dealing with numbers is prone to errors. You can easily mistype an amount or miss a transaction. Also, if your formulas are not correct, it can give you erroneous reports. And the worst part is, it can easily go unchecked and unnoticed until a proper audit is done.
This does not generalise the idea that Excel is not useful as a tool in bookkeeping. These are just considered as precautions that you should know if you want to use Excel. You just have to be very careful of anything you encode because it does not have a program for checking.
If you really want to use Excel in bookkeeping, I suggest you hire a professional bookkeeping. This will allow you to be more confident of your records since there is someone skilled to do the job. Eclat Accountancy Ltd offers you different bookkeeping services that will surely help your business. Click here to visit their website.