In my work with social enterprises, particularly small ones, a common area on which I am consulted is the adequacy of accounting systems and how they may be improved.
I often find in small, newly founded enterprises that an Excel spreadsheet is being used. While I have found some examples of very good and perfectly adequate Excel-based systems they are in a minority and, while Excel is a powerful tool, it is not a robust substitute for a proper double entry book keeping system (nor was it designed to be).
The reasons why Excel spreadsheets are inadequate are many and include:
1. They are not double-entry based and there is no cross-check or control to ensure that every transaction has a debit and credit entry;
2. Notwithstanding the ability to set passwords in Excel, they tend to be less secure than accounting packages;
3. It is easy for formula or transactional data to be accidentally overwritten (protection may be the solution to the former but will be cumbersome and less effective for the latter);
4. Data may be lost through forgetting to save work regularly where, in accounting systems, once you post a transaction it is automatically saved;
5. Excel spreadsheets are prone to becoming easily corrupted;
6. If you have a spreadsheet on a standalone computer (particularly a lap top), rather than being connected to a network, there is a risk of the data being lost, with dire consequences, unless it is backed up regularly – there are a number of low-cost web-based systems (e.g. Kashflow and Xero) available, where the data is protected as it is saved to the Cloud.
Web-based systems like Kashflow and Xero start from less than £10 per month for a very basic package. They can be accessed from smart phones and tablets as well as computers, enabling you to do your accounting on the move if required. They are also tailored for use by those with little or no accounting knowledge or experience. Being web-based also means that if your employees are remotely disbursed, they can easily access the system.
If your prefer something low-cost that isn’t web-based, Intuit Quickbooks offers a very powerful alternative with a 1 user licence costing less than £100.
Each of the above options allow easy transfer of data from the system to Excel to facilitate reporting and analysis.
There are other packages available but those that I have mentioned are the ones in most common use in my experience.
If you require any further information, would like an assessment of your current accounting system or advice and assistance in choosing a system please contact me without obligation 07740 191557 or Email Me