Tracking your business expenses in a spreadsheet can keep you from understanding your financial picture. Check out the top 10 reasons to get your finances out a spreadsheet. #businesstips #entreprenuertips

 

I love Excel. I love Google Sheets. I love Numbers. I basically love anything that will make me a spreadsheet and I’m obsessed with spreadsheets in my day to day like. So I feel a bit like a traitor writing this post because spreadsheets and I are soooooo tight.

But, like any good friend, I have to be honest about something- when it comes to tracking your finances, spreadsheets suck. They are like that friend who keeps promising to fix the flat on your bike but never gets around to it because they don’t actually know how.

Here’s why spreadsheets are never going to fix your financial flat:

1) They become monsters to navigate

It’s all fun and games in January when you barely have any info in your spreadsheet, but by October you’ll be lost in the murky waters of scrolling, filters, freeze frames, and worksheet tabs as you try to navigate your data.

2) You actually have to do math

Yes, spreadsheets do let you set up formulas and calculate your data, however, you still need to understand
the mathematical logic behind the formulas, which means at some point you are going to do math.

3)  It’s easy to miss expenses and deductions

Spreadsheets don’t have an accountability system that makes sure you have entered in everything on your bank statement. It’s entirely up to you to keep track of what you’ve entered. Even folks with the best intentions usually miss something and missed expenses mean missed deductions at tax time!

4) You don’t know if you’ve made a mistake

Similar to #3, without an accountability system, it’s easy to skate over mistakes. If you accidentally type $66.60 in as $6.60, then it’s up to you (and rifling through bank statements) to check for and resolve errors.

5) You’re going to have a lot of different spreadsheets for a lot of different things

There’s more to track in business than just expenses. You may also have a mileage spreadsheet to track your business deductible mileage. And a spreadsheet to track all your income and expenses from Workshop A. And another for Workshop B. And another for that Ebook you just launched. And another to keep track of everything you spent to redesign your website. See where I’m going with this- a lot of spreadsheets.

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6) You can’t run monthly reports

Spreadsheets are great containers for information, but they aren’t so great for analyzing information unless you want to spend a lot of time setting up custom formulas (see #2). You might be able to see a basic version of a Profit and Loss report via a spreadsheet, but if you want to dig a little deeper you will fall into a deep formula spiral, only to emerge hours later with same information you could have retrieved somewhere else with a single click.

7) You can’t compare previous year data

Most people using a spreadsheet system have one workbook for the entire year, but what happens when you want to know what happened last year? How about in the first quarter of last year? See #2, you’ll be doing math.

8) They won’t grow with your business

When you are first starting off and only have 15 expenses a month a spreadsheet seems like the easiest solution for financial tracking but as your business grows so will your expenses. Can you imagine yourself entering 50 expenses a month into a spreadsheet? How about 100? Yea, me either.

9) They don’t integrate with anything

If you are using other software or apps for your business, like invoing or inventory management, your spreadsheet might as well be stranded on a desert island chatting with a volleyball because it will not be talking, syncing, or playing nice with any of your other business software.

10) You’re not getting to see your full financial picture

A spreadsheet is only showing you your expenses and maybe your income. You don’t get to see how much you owe on your credit cards or loans, how much other people owe you, or what assets you have as a business owner. How can you fully assess your financial health if you are only seeing a quarter of what you have? The answer is you can’t.

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Tracking Expenses| Small Business | Financial Organization
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