Some friends and I are starting a small landscaping cooperative, and are thinking about how we will manage accounting. Places we've worked in the past have used Excel spreadsheets to manage all of their finances.
However, a lot of the stuff I've been reading online has been suggesting that for all but the most simple businesses, it is better to use accounting software such as Quickbooks or Gnucash instead of spreadsheets.
Some of the reasons I've seen for this are that:
- Working with Excel formulas is complex and prone to error. Accounting software handles all the calculations for you, and does it properly.
- Excel spreadsheets are susceptible to fraud because it’s easy to change information and hard to keep track of who’s making the changes, whereas accounting software maintains an audit trail.
- Spreadsheet errors are easier to make (copy/paste errors, moving content out of cells that other formulas base their calculations on, etc.), and are much harder to track down.
- Each income stream requires a different spreadsheet to track our earnings ... this means that as we start offering more services, the number of spreadsheets will increase, and this can become confusing.
Would you all say that these are fair claims? Are there any other reasons you would prefer accounting software over Excel (or vice versa)?
Basically, why would you recommend that a new business do all of their accounting with specialized software instead of just managing it all in spreadsheets?