Microsoft Excel is specially designed for accounting functions support. These functions include preparing financial records and statements, budgeting, bookkeeping, and working on balance sheets. Excel comes with fundamental spreadsheet functionality and other several functions needed to facilitate complex mathematical computations and calculations.
Excel also supports add-ons for several activities like financial forecasting and modeling and integrates seamlessly with external figures and data. This allows users to export and import financial data and banking information from and to other software platforms in accounting.
Microsoft Excel has many uses and it cannot be denied that individuals, companies, and accounting firms are relying on its functions in terms of inputting files and keeping them organized. There are numerous scenarios where excel is widely used and these includes the following:
Sales and Billing
Ways to Use Excel in Simple Bookkeeping Tasks
Creating a journal entry
The simplest use of Excel is the initial creation of journal entries. A journal entry would include all types of transactions (sales, purchases, payroll deductions). It will also be used to record how much money you start with at the beginning and end of each transaction. This can easily be done by creating an account called "cash in" in your budget.
Filling out the preliminary information
The next step is to report on your initial cash balance, which can be done by simply creating another account called "cash in". Once you're able to record each transaction and track how much money you have left at any time it's easier to see if there are large withdrawals or deposits. This will also help you better report on your monthly income and expenses.
Keeping track of transactions
Using Excel to keep track of your daily transactions will allow you to quickly find out how much money has been spent on certain items. This can be done by creating a new account for each type of expense or income (e.g., "food", "clothes"). You should also create another bank account called cash out, where you will record all your expenses.
Creating your monthly spreadsheets
Since you will be using this for an entire year, it's best to create a spreadsheet with all 12 months. You also want to make sure that the first column is used for entering each transaction (i.e., January should start from cell A15). The second column can then be used to enter the type of transaction (i.e., Cash In, Food, etc.). The third column will be used for your totals in cash in and the fourth one is intended to help you easily sum up each type of transaction.
You can now create a report that will be used for each type of transaction. For example, since you are keeping track of your food expenses you may want to have one sheet called "Food" which is where all the transactions are entered and then another sheet where you simply sum up how much money was spent on food in every month. It's also helpful to create a monthly report on how much money you have left in cash at the end of every month.
At the end of every month you can create a graph that displays how much money has been spent on different items. This will be particularly useful if your budget is tight and you want to see where all the money went in each category, for example food or entertainment. You can also easily compare how many dollars have been saved this year compared to last year, or how much money has been spent on clothes compared to food.
You can use Excel to create chart reports. For example, you may want a pie chart that displays how much money has been spent on food or another bar graph which helps track expenses over the year. These are great tools for visualizing your data and making it easier to analyze trends in your spending habits (e.g., see if you are spending more money on food or clothes).
I hope this post helps you better use Excel and shows that it's not as hard to learn as some people might think. It can be a great tool for simple tasks such as bookkeeping, but also has many other features which makes it even more useful.