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Bookkeeping with Excel Templates: Pros & Cons

Thinking of using an Excel sheet to manage your bookkeeping? Find out the pros and cons of using an Excel sheet to manage your small business' bookkeeping.

Bookkeeping can be seen as a boring task where a person sits for hours at a desk covered in receipts, staring at a screen filled with rows and columns of numbers, all resembling a deep matrix that makes it difficult to escape from.

Traditionally, businesses use programs like Excel to handle their business finances. Given that technology keeps evolving and software has gotten more automated, approaches to bookkeeping have evolved too.  

Yet, businesses and entrepreneurs have been using the age-old tool of Excel for their bookkeeping, budgeting, and accounting needs. All this leads to the question if it is still a viable tool or has its share of downsides.

Let’s explore bookkeeping with Excel templates and look at its pros and cons objectively so that you can make the right decision for your business.

Bookkeeping in Excel Sheets

If there is data, you can use Excel to record it. However, this data recording process is a time-consuming, arduous, and expensive task on most occasions, but it certainly can be done.

The main purpose of Excel would be to record financial data such as purchases, expenses, and sales in various accounting spreadsheets.

These spreadsheets are then used to create and maintain records of other business data such as inventories, suppliers, and employee information.

You can use Excel to make calculations, create visual graphs and charts of data, and templates for several numerical functions and tasks.

Figuring out all of these functions can initially be a challenge as Excel usually involves a gradual learning curve. It’s easy to find tutorials online that can help you learn how to use Excel. Additionally, you can also take a course that teaches you how to operate it.

Bookkeepers mainly use it to record data using the Excel bookkeeping templates. They also use macros and formulae and make graphics, charts, and diagrams.

Data Recording

Recording data in Excel is quite simple. Each spreadsheet contains a grid comprising columns and rows, with a header on top and a similar header column on the left. To record your data, you can click on the cell and type the required information.

One can record financial data, as well as other types of data like client and product information. You can also create separate templates for each, such as inventory and employee salary, accounts payable, and receivable.

Creating and Using Excel Bookkeeping Templates

Excel has a list of pre-made templates that one can choose from for their bookkeeping needs. These templates are generic and are meant for small business bookkeeping, and may require customization based on your specific needs.

To utilize these pre-made templates, you follow the steps below -

  • Under Files, find the template required, such as Ledger, Invoice, Financial Statement, or (link: text: Bank Reconciliation Sheet).
  • Templates will have cells where you can fill in data and have built-in macros and formulae to calculate the function at hand. You can fill this template with your data or import it from sources that are compatible with Excel.

After these bookkeeping templates are made, they can also create advanced versions for more account-related tasks such as forms, receipts, invoices, and basic financial statements and reports. Let’s now look at the pros and cons of these bookkeeping templates.

Pros of Excel Bookkeeping Templates

Excel offers several advantages, some of which are listed below -

1. Data Organization Is Easy

Excel allows users to easily store and organize data in a structured manner and customize it in any way. One can also present the data and accounting results in the form of pie charts and other graphs. This is easy, and anyone can pick it up, including beginners who have just started using the tool.

2. Macros and Formulae

Macros and formulae make data calculation efficient. The spreadsheet automatically calculates the data without any manual intervention. Every month when your business' financial data changes, the whole report doesn't require a major change. Features such as “What-if” are excellent for forecasting budgets based on user preferences.

3. Forecast Sheets

Similar to the “What-if” feature, forecast sheets help users draw estimates with historical data, which aid in forecasting current and future cash flows.

4. Customized Templates

It is easy to create bookkeeping templates that you can reuse every month. All purposes, such as recording macros or applying calculation formulae, can use customized templates.

This helps save costs and energy for specific business purposes such as receipts, invoices, and other reports that are required every day.

5. Ready-Made Templates

Even though one can customize templates according to their requirements, Microsoft Excel does provide solutions of ready-made templates from their library of invoicing, budgeting, and other accounting trackers.

6. Dataset Comparison Is Easy

Revenue comparison between months and years is a common practice. Comparing such financial datasets can be done with one click. You can also compare your customer base across geographies, and analyze other factors like age, preferences, spending capacities, etc., to understand your audience better.

7. Affordable Option

Start-ups and small businesses have to manage their finances judiciously, as every penny can go a long way. As a result, using Excel templates makes sense since they are affordable when compared to full-fledged accounting software.

Cons of Excel Bookkeeping Templates

While Excel has its benefits, it also has many disadvantages that one might want to consider. Some of these are listed below -

1. User-Defined Reporting Filters

Every new user has to set their own filters for the same data. This affects reporting results since the filters are defined and set by one user.

2. Macros and Calculation

Macros and calculations in Excel make the workflow more efficient. Yet, there is a learning curve associated with them. Users need to develop a certain level of proficiency, only after which they can use these features to their benefit.

Learning the right syntaxes to enter formulae is another aspect that can make it hard for beginners to pick up on Excel. Additionally, entering any wrong data can impact the whole calculation and result in an incorrect report.

3. Data Collection Is Tedious

A business has multiple sources of information. Third-party dealers, vendors, suppliers, customer information, and internal data. All this data collection can be a tedious process since one person has to collect them for a single spreadsheet.

Moreover, one wrong entry can result in the entire report becoming incorrect.

4. Privacy

Spreadsheets always have a threat of hacking and are not safe even when protected with a password. Competitors or criminals can misuse this data for malicious activities. Ultimately a business is responsible for protecting their financial data at any cost from such users.

5. Not Automated

We are living in the age of automation. Yet Excel is not the most automated software and is slow and cumbersome, which makes the bookkeeping process rather tedious. In today's age, you can opt for a more automated process to make your workflow easy while allowing you to focus on other aspects of your business.

6. Delays

Using Excel requires that data collection be done manually from multiple sources. Further, this data needs to be checked and rechecked with the concerned authorities. All of this results in big delays and hampers the bookkeeping process. Any urgent report or data can become stressful with Excel and can also result in an error due to incorrect manual inputs.

7. Can't Forecast

Excel lacks the ability to predict a business’ future growth or revenue potential. Also, storing two different reports and collecting them later to compare is cumbersome and highly inefficient.


We see that Excel can be easy for some straightforward accounting, albeit with a learning curve. However, to make life easier, you will need more automated software as it can give small businesses like yours a much-needed boost. Additionally, more professional software is generally more robust, scalable, user–friendly, dynamic, reliable, and secure than traditional Excel accounting.

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