You can keep your books in a spreadsheet, and that can work well for a while. A spreadsheet is free, flexible and familiar. The trick is knowing when it stops being enough, before a messy year-end costs you time or money.
The short answer
- A spreadsheet is enough if you have a few dozen transactions a month, one bank account, few invoices, no staff, and simple taxes.
- Move to accounting software if you spend hours each month typing in transactions, you chase many invoices, you hire, you collect sales tax or VAT, or your accountant asks you to.
QuickBooks is one option. Xero, Zoho Books, Wave and FreshBooks do the same core job. See QuickBooks alternatives for small business to compare them.
What a spreadsheet does well
- It costs nothing extra if you already have Excel or Google Sheets.
- You set it up exactly the way you think.
- It is easy to share with an accountant once a year.
- It works for budgets and forecasts too.
A simple layout that works
- Date
- Description
- Category
- Money in
- Money out
- Receipt link
- Checked against bank (yes or no)
Add one row for every transaction. Use the same short list of categories each time, such as Sales, Materials, Software, Travel, Rent and Owner pay.
At the end of each month, total each category and compare the balance with your bank statement.
Keep the categories close to the ones on your tax return, so year-end is a copy job. An accountant can tell you which categories your country uses.
Where a spreadsheet starts to hurt
Typing in every transaction
A basic spreadsheet does not connect to your bank. You type or paste each line. Accounting software imports bank transactions for you and suggests categories. Your job becomes checking. If typing takes you more than an hour or two a month, that time has a cost.
Invoices and who owes you
In a spreadsheet, tracking unpaid invoices means a separate list you must keep up to date. Accounting software creates the invoice, records it and shows what is overdue. Tools such as FreshBooks and Wave Pro also send late payment reminders. If late payments hurt your cash flow, this alone can be worth the move.
Mistakes that hide
One wrong formula or a pasted row in the wrong place can throw off your totals without warning. Software uses double-entry rules, so the books are harder to break by accident.
Staff, sales tax and more people
Payroll, sales tax or VAT and a second person working in the books all add rules and risk. Spreadsheets have no built-in checks for any of it.
What QuickBooks costs
As of October 2026, QuickBooks Online in the US has a Free plan with 1 user, 1 bank connection and 2 invoices a month, unless you turn on QuickBooks Payments. Simple Start is 38 dollars a month for 1 user. For one-person businesses, QuickBooks Solopreneur Lite is 20 dollars a month. Prices differ by country and change often.
If you like spreadsheets, you do not have to give them up. You can keep your budget and forecasts in a spreadsheet and your books in software. QuickBooks Advanced even lists Excel sync as a feature.
How to move without a mess
- Pick a start date, such as the first day of a month or tax year.
- Close your spreadsheet at that date and check it against the bank.
- Note your opening balances: bank, money owed to you, money you owe.
- Set up the software with the same categories you used.
- Connect your bank from the start date only.
- Ask your accountant to check the opening balances.
Whichever you use, the routine in bookkeeping basics matters more than the tool. And good books make it easy to check your profit margin each month.