Bookkeeping using spreadsheets-is it right for your handmade biz?
Bookkeeping Basics for your creative biz

Bookkeeping using spreadsheets

Bookkeeping using spreadsheets was the most popular answer to a poll I created this week in my Free Facebook community.  I asked the members of the community to tell me what they would like to learn more about:

  • creating a bookkeeping system using spreadsheets
  • setting up QuickBooks Online to do your books
  • using QuickBooks Desktop to do your books

The most popular option was “how to set up a bookkeeping system using spreadsheets” and I have to admit part of me was quite surprised.  Here’s why:

Excel and/or Google Sheets are NOT bookkeeping programs – they are spreadsheet programs

Which means, that in order to do any sort of bookkeeping, you are going to:

  • need to create MULTIPLE spreadsheets
  • have to update two (2) or more spreadsheets each time your record a transaction for your handmade or creative business
  • need to learn how to combine all the data from those individual spreadsheets into one spreadsheet that summarizes the year in order to do your taxes.

In order to use spreadsheets to do your bookkeeping, it also means that you have to have a good basic understanding of how to use the spreadsheet program of your choice as well as basic computer skills. 

How many spreadsheets do you need to do the bookkeeping for your handmade/creative biz? I'm betting it's a LOT more than you think!You’ll need to know how to:

  • format the rows and columns in the spreadsheet
  • create and use formulas (like how to create a formula that will add up all the numbers in a column or row)
  • create macro’s to automate repetitive actions
  • copy a template or a worksheet
  • update or make changes to an existing spreadsheet
  • rename a worksheet that you’ve copied
  • use the program to work with all the data that you’ve entered

While these may seem like simple tasks, they really aren’t so simple.  That’s because many of us either aren’t confident about the skills required to use a spreadsheet program or perhaps we really just don’t have the time to build a bookkeeping system from scratch.  Which leads to another option of purchasing or downloading a free a pre-made template.

The trouble with buying or downloading a free pre-made bookkeeping spreadsheet

Sure there are tons of bookkeeping spreadsheets available on the internet that you can either buy or download for free, just do a simple Google search for “handmade business bookkeeping spreadsheet” and you’ll come up with an overwhelming 186,000 results!  Some are free and some you have to pay for, but they all proclaim that they are “the best” or that they make bookkeeping “easy”.

Neither statement is true – but go ahead and start digging through those 186,000 results – if you have the time.

I’ve looked through a lot of the free bookkeeping spreadsheets and read about the ones that you can buy and I’ve come to the conclusion that………

Unless you have the exact same type of business that the bookkeeping spreadsheet was designed for it is neither the best one for your business or that it will be easy!

You’ll still need to:

  • have a good understanding and working knowledge of the program that the spreadsheet was designed with
  • format the rows and columns in the spreadsheet
  • copy a template or a worksheet
  • update or make changes to an existing spreadsheet
  • rename a worksheet that you’ve copied
  • use the program to work with all the data that you’ve entered
  • know how to modify it to meet the needs of your business
  • create new sheets in the spreadsheet to track things that aren’t included

Because, let’s face it the bookkeeping needs of a maker are far different than the needs of a designer, yarn dyer, or even a tech editor.  There is no one bookkeeping system that will meet the needs of these different handmade or creative business types and that is a definite problem.

And then there is one final complication —– and that’s the fact that it’s likely that the person who designed the spreadsheet locked all of the cells that contain formula’s or macro’s, making it virtually impossible for you to make changes even if you know how.

I toyed with and even started to create a spreadsheet bookkeeping system using Excel that I could offer you and this is what I found…

In order to successfully track ALL of the various income, cost of goods sold, expenses, and other tax related information for an entire year that the bookkeeping spreadsheet would have to have:

  • 7 master sheets or tabs (which would need to then be copied) into
  • 31 additional sheets or tabs
  • to complete or update on a monthly basis
  • in order to complete your books for an entire year

Even if I created this system, you would:

  • STILL need to modify the initial 7 master sheets or tabs to meet the needs of your business
  • have to have a good understanding and working knowledge of the program that the spreadsheet was designed with
  • need to be able to copy the format of rows and columns in the spreadsheet
  • be able to copy a template or a worksheet tab
  • update or make changes to an existing spreadsheet
  • rename a worksheet that you’ve copied
  • use the program to work with all the data that you’ve entered
  • know how to convert my Excel based system to use with Google Sheets

I thought this was all just too much!  Too much for me to tackle and too much for you to have to learn how to use.

Do you still think that bookkeeping using spreadsheets is what you want to do?

Next week, I’ll discuss using software such as QuickBooks Online or QuickBooks desktop to handle your bookkeeping.

Happy Handmade!

Nancy

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Nancy Smyth, The YarnyBookkeeper

Hi, I'm Nancy. I'm a yarn addict, career bookkeeper, and handmade business owner. I get the same feeling of joy when working with yummy yarns as I do when working with a column of numbers that all add up correctly.

Bookkeeping for your handmade or creative business doesn't need to be scary. I can help you learn to handle your bookkeeping and other behind the scenes STUFF with confidence!

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