This week I had a call with a client that was so relieved to be getting help with her books. She was in her 60’s and has been running an amazon store for a while. She wanted to do it right, so she went to her CPA for help. I’m so sorry to say that she got bad advice. Her CPA recommended that she run her entire business using a spreadsheet.

Spreadsheets are Substandard

While I love my spreadsheets and they are an amazing tool, they do not replace a true double entry accounting system. The double entry method has been around since 1494, a long time. It’s still the process we use because it works. We can track those debits and credits and reconcile back to the statements from the bank or credit card company. Then we know we balance.

For an accountant, this keeps our anxiety low. Unfortunately, spreadsheets don’t have that rigor. You can easily forget to enter numbers and your balances may not match back to your bank. Even if you do all this perfectly, it’s a lot of manual data entry, whereas an accounting system like QBO or Xero will automatically pull the data from your bank. And using a system like Inventory Lab helps you track your inventory through Amazon with ease.

Automatic Accounting

Why would anyone want to spend time with such tedium when an automatic system can do it much more accurately and efficiently. You can spend your time analyzing the information instead of manually preparing it in a painstaking process. Unfortunately, the spreadsheet advice had a ripple effect for our client that led to other bad results.

The bookkeeping fell behind because it was so labor intensive, and this client had many other tasks to make her business run smoothly. As a result, her profitability numbers weren’t available and when they started to decline, she didn’t realize it.

So, she started off our call confessing that she had a mess, she wasn’t profitable, and she was embarrassed. To be honest, I was the one embarrassed. This woman had followed bad advice from a professional in my field. How could she have any confidence in what I would advise? Luckily, she put her concerns aside and now we can get her set up to know her numbers and get on the path to profitability.

If you’re struggling with your finances, take an hour a day and make it a priority to better understand them. There are so many free resources out there. If you need a place to start, go to the bookskeep blog and pick a topic from the featured categories.

Everything that we do for clients is available to you for free on our website. We don’t hold anything back from those that want to DIY it. If you need some support, reach out to us today!