Back in the heyday of Microsoft Windows — long before the boom in cloud solutions or even of the internet itself — Microsoft Excel appeared full-bloom as the solution to get one’s ledgers and accountancy practice in tip-top shape.
Rightly so. The software was a boon to number crunchers. And when Microsoft added advanced charting features and new formulas, the tool became nearly indispensable for the average accountant.
But then the internet and cloud solutions came along.
Using Microsoft Excel for accounting — pros and cons in today’s world
Yes, Excel is an excellent tool in itself.
But it’s outdated.
We were recently named as a finalist for the Accountancy Excellence, Digital and Innovative Firm of the Year award. One of the main reasons we were chosen was because of our relentless efforts at modernising and streamlining our firm.
We use extensive cloud solutions in our office. As a result, when COVID-19 hit and the UK went into lockdown, the company was able to keep going and staff were able to work from home without too much disruption. The reason we were able to do this was that we did not rely entirely on Excel.
The main pro of Excel is that it is a tried and tested tool which works well on personal computers. And its biggest con is related: Excel was not designed for the cloud, and so it struggles to play catchup to other cloud-run services.
Another pro is that Excel so versatile — it can be used to do many different things. With a bit of knowledge, one can create a workbook to track personal finances, and then create an entirely different workbook to manage projects.
But without extensive knowledge of Excel, one’s efforts would be second-rate at best, and the workbook would be liable to errors.
Also, it takes time to create each of these workbooks, as well as protecting the cells so they don’t get mistakenly overwritten, adding conditional formatting, on and on and on — plenty of valuable business hours for one workbook.
And that’s not mentioning the cost of every single license needed for each of your staff to run Excel.
Alternatively, one could simply sign up for Monday.com and have project management instantly working. Or, one could sign up for QuickBooks Online or FreeAgent and have instant access to accounting tools.
Alternatives to Excel for Accounting and Finance
QuickBooks, Xero, FreeAgent, Zoho Books — all of these tools offer excellent functionality which is specific to accounting and personal finances.
And there are others.
As for personal finance, there are tools such as Money Dashboard, Buxfer, and so on.
As accountants, our main interest in these tools is that they can be connected to directly so as to obtain financial information for our clients.
The world has gone “cloud”. People want to access services on their phones, on their browsers, and even on Chromebooks. Microsoft came out with a web-based version of Office (and, therefore, Excel) a few years ago to compete with that. But the web-based tools is limited.
Is Excel good for accounting?
Yes, if one knows Excel.
It’s also plenty of “fun” to tinker with — learning different formulas, automating various tasks, making all the cells change colours automatically…
If you have a lot of time on your hands, yes, it’s an excellent tool which takes plenty of time to set up and make useful.
It’s easier to simply sign up for one of the top accounting tools online which already takes care of all the specific features you might need.
Determining what is the best software for business accounting comes down to a matter of taste in many cases. There are simply so many excellent accounting tools for businesses out there, that deciding on one often comes down to (1) pricing and (2) features which align with your specific needs.
But that’s the point: Those tools are designed for accounting. And many of them offer a plethora of features that are ready to use out-the-box. No need to tinker and fiddle and spend hours and hours configuring the tool because all that work has already been done.
How to move from Excel to another solution
Most likely you would need to move to several platforms, not just one. But it’s easier than you think.
The key thing is to determine precisely what you are using Excel for, and then finding which solutions match those needs.
The good news is that we already have a free-to-download book naming all the tools your accountancy practice might need to streamline its workflows and reduce its workload.
In order to turn a profit in this competitive field of accounting, it is imperative that one stays on top of the latest innovations, the latest tech, and even the latest AI developments in order to continue winning in the game.
Too many accountancy practices find themselves struggling to turn a profit after many years of trying to succeed. In our experience, many of them have found themselves in this difficult position because they did not embrace new technologies and methods of doing things.
In the world of accountancy, the dog not only needs to learn new tricks, but it also needs to learn to work remotely and on the cloud!
