The age-old question...How should I do my bookkeeping?

Here is a list of advantages and disadvantages of QuickBooks vs. Excel

QuickBooks (QBO)

ADVANTAGES

One of the biggest advantages of using QBO is that all of your transactions are recorded automatically because you can automatically link your bank account and credit card to your account. All you have to do is categorize the transactions (once a month, ideally) and attach a receipt! Attaching receipts is easy with their new Receipt Snap application.

QBO also categorizes your GST/HST expenses so you know what your payable refund is, instead of manually calculating it from your expenses for your GST/HST return. No more manual tracking of your expenses for this breakout!

Another advantage is the ability to bill patients directly. If you are using a booking software like Jane or Practice Better then this feature is included, but if you aren’t using a booking app this is a great (and price included) way to bill patients. You can accept credit card payments directly through the invoice so getting paid is simple and easy!

If you really hate doing your bookkeeping, I always recommend QBO. The automation r is really game-changing. You can give access to your accountant for review or completely outsource to a bookkeeper! The software is also built to easily track and pull up information; especially when required for tax audits by the CRA.

DISADVANTAGES

The QBO subscription cost starts at $20/month (or $16/month if you use our wholesale discount!) so this is an investment into your business and its processes (that you can claim).

You absolutely MUST have a separate bank account in order for the automatically linked accounts to work. I always recommend having a separate bank account regardless of what system you use, but there are additional fees to having a formal business bank account (which you can also claim). QBO will not be able to track any tax-deductible expenses that are not in your business bank account (think home office or vehicle deduction).

One of the biggest barriers to QBO is that it requires some set-up.; You’ll need a bookkeeper, accountant, or some kind of training to create the chart of accounts and ensure your using it properly. Like any new tool, there is always a learning curve to get comfortable with the software. We offer training sessions for this exact purpose to set you up for success.

Excel

ADVANTAGES

Since you likely already have excel (or sheets) on your computer, there is zero cost! If you’re comfortable with Excel, the formulas can be simple to use and you can create graphs to help you visualize how your business is performing.

If you are using excel but need some help to make your bookkeeping a breeze, we also offer a 90-minute training session where you’ll learn a simple 6-step process that will make monthly bookkeeping in Excel fast and effective. Book using this link.

DISADVANTAGES

If you have less experience with Excel or spreadsheets, using Excel for your bookkeeping can be intimidating and make you more likely to avoid bookkeeping. There is also a risk of manual error since you will be tracking your receipts and transactions separately.

Excel wasn’t designed for bookkeeping, unlike bookkeeping software such as QBO. You have to design your own process and make sure it’s the best for your business and serves the purpose of tracking and presenting your business’ financials.

You will need to manually create reports like your Annual Income Statement (v.s. automatically by Quickbooks) to file your annual tax return.

If you are registered for GST/HST, you must also manually remove the sales tax from all expenses.

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Ready to step up your bookkeeping game? Business Foundations: Bookkeeping Webinar covers everything you need to know about bookkeeping. Click here to register now.