While bookkeeping software is a great tool for completing the bookkeeping tasks, it can be expensive for a small business to use. A cheaper way to keep your financial records organized is Microsoft Excel. Using Excel to keep your books is more work, but if your business is just starting out or very small, it might be the best option for you.
The easiest way to use Excel for your business’s books is if you choose to follow the cash-basis, single-entry method of bookkeeping. Label your spreadsheet with column headers you plan to use, including “Date”, “Transaction Details”, and “Amount”. You can add whatever headers you think are best for your business, and even separate income from expenses; however you want it to be kept is up to you. Once you have your template ready (don’t forget to format it – Date as a date, Amount as money, etc.), you can start recording every transaction that occurs in your business. It is a good idea to track each month on its own sheet in the Excel file, so if there ever is an error or something that needs to be changed, you can easily run through your records to find it.
Once it becomes overwhelming to enter all your business’s transactions manually, it might be time to look into bookkeeping software.