How To Use The Income Template From Excel

Sometimes life forces you to use spreadsheets. If y'all're planning to practice your small business organization accounting with Excel, this is 1 of those times.

Just at that place are ways to brand the procedure easier. Nosotros'll prove you how, using Bench'due south Income Statement Excel Template to become started.

Offset: What Excel can and can't do

Microsoft Excel (and its simpler, online cousin Google Sheets) is adjustable. The meliorate you know how to use it, the more you can get done. That being said, even if you're adept enough at Excel to compete internationally, there's only so much you tin can do with it in a DIY bookkeeping context.

Here's a summary:

Bookkeeping tasks you can exercise in Excel	Accounting tasks you can't practise in Excel
Prepare a unmarried-entry bookkeeping organization, which you update manually	Automatically import transactions from your bank accounts to your books
Perform basic calculations to create financial statements	Take your transactions automatically categorized for you
Track invoices you've sent clients	Take hold of human errors
Salvage business records on your hard drive, or in the cloud with Excel Online or Google Sheets	Become answers to questions almost your finances

Single-entry bookkeeping in Excel

Before we become started on DIY bookkeeping, download a copy of Bench's Income Argument Template. Later, you may prefer to use a dissimilar template, or even create your own. But when you're getting started, the Income Statement Template is tidy and approachable. And it has everything you need to get a grasp of single-entry bookkeeping in Excel.

Unmarried-entry bookkeeping is a good choice if you run a small, uncomplicated business with a low volume of transactions. Every time money enters or leaves your business organization, it's recorded once, as a positive (income) or negative (expense) value.

A quick heads upwards near double-entry accounting. The double-entry method of bookkeeping is standard for larger, more complex businesses. It's more effective than single-entry for tracking cash flow and protecting against errors and fraud. However, information technology's also more work to maintain—and difficult to set up in Excel. If you're at the betoken where you lot believe your business needs double-entry bookkeeping, it'southward time to use accounting software. Or, think about hiring a bookkeeper (like Bench).

What you need to utilise the Income Statement Template for DIY accounting

Before you get started with Bench's Income Statement template, brand certain you understand the differences betwixt unmarried-entry and double-entry bookkeeping. Y'all'll too demand access to spreadsheet software such as Excel or Google Sheets.

Understanding the Income Statement Template

In that location are three sheets in Bench'south Income Statement Template:

i. The Chart of Accounts

This lists all the accounts that make upwards your books. Think of each business relationship a category. Every transaction you tape gets sorted into one of these categories.

two. Transactions

This contains details of every business transaction you perform—the date, a clarification, the amount, and the account.

3. The Income Statement

This pulls info from your Transactions and performs some basic calculations. Then it summarizes how much income your business has earned and spent within a defined date range.

Customizing the Income Argument Template for your business

The info in the copy of the Income Argument Template you downloaded is only there as a placeholder. Here's how you adjust it to your concern.

ane. Add together or remove accounts from the Chart of Accounts

The Chart of Accounts includes an account for "Gas & Motorcar." Only if you don't drive for piece of work, yous don't demand this row—and then you can delete it. The same follows for any other account that doesn't apply to your business.

As well, if there are any transaction categories you demand for your business that are missing from the Chart of Accounts, you should add them.

A note about account types:

Income designates any business relationship used to track coin coming into your business.
Expense designates whatever account used to track money leaving your business.
Cost of Auction (COS) and Cost of Goods Sold (COGS) are unique. These accounts runway the money yous take to spend to create the product y'all sell your customers or clients. They're often used interchangeably—COS by retailers, and COGS by manufacturers. Learn more than about computing these expenses.

bookkeeping in Excel 1

2. Articulate the Transactions canvass

Earlier you can start tracking your own transactions, you need to clear the placeholder information.

Select everything in the Engagement, Description/Transaction, and Category columns, and delete it.

bookkeeping in Excel 2

3. Add together or remove accounts from the Income Statement

By default, the Income Statement includes information for every business relationship listed in the Chart of Accounts. If yous've added or removed accounts from the Chart of Accounts, make the aforementioned changes to the Income Argument. For instance, if yous don't runway "Gas & Auto" as an expense, delete the row.

bookkeeping in Excel 3

4. Make copies of the Income Argument for each calendar month

In gild to generate monthly Income Statements, y'all'll need separate sheets for each month. Brand twelve copies of the original income statement, one for each month in the year.

Then, on each Income Statement sheet, change the Date Range (Beginning Rate and End Date) to cover the relevant month. Name the sheet after the month it covers.

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v. Optional—Add a sheet for tracking invoices

When y'all enter income from paid invoices into your Transactions sheet, include the invoice number in the clarification. That manner, you can cantankerous-reference it, and avoid errors—like forgetting to enter invoice payments, or entering the same invoice twice. This is a lot easier if you've got a divide canvas to rails your invoices.

First, download a gratuitous invoice template for Excel, or get i for Google Sheets. And then, add a new sheet to your Income Statement Template. Copy and paste the information from the invoice template you lot downloaded into the new sheet.

Keep the tab for your invoice tracker to the correct of the Transactions canvass, simply to the left of your monthly Income Statements. Information technology'll be easier to cheque for reference.

6. Optional—Add a sail for projecting greenbacks menses

Excel spreadsheets aren't upwardly to the task of creating a proper Greenbacks Menstruum Argument that you can nowadays to investors. However, for your ain personal planning, you can still plan your cash period calendar month past calendar month in a simple spreadsheet.

To get started, check out our Google Sheets Greenbacks Period Projection Template. Copy and paste it into a blank sheet side by side to your Transactions.

Keeping your books up to appointment in Excel

Once y'all've customized the Income Statement Template for your business, you'll mostly exist using the Transactions sheet.

Input and categorize transactions

Every time a transaction takes identify—whether you're moving coin, cash, or credit—you need to enter it into the Transaction sheet, in its own row. And then you demand to categorize information technology.

When you use Demote, your transactions are automatically imported and categorized for you. But for DIY bookkeeping in Excel, yous'll be doing it yourself.

Get a record of the transaction. That could be a credit or bank carte du jour statement, info in your Paypal account, or receipt from a greenbacks payment.
Enter the engagement the transaction was recorded under the Engagement column, using DD/YY/MM format.
Categorize the transaction. Enter its relevant account under the Category column. Be sure to type information technology exactly as it appears on the Chart of Accounts. The Income Statement will await at the data you lot enter in social club to figure out how the transaction will exist categorized.
Add any notes for yourself in the Description/Transaction column.

Save income sheets

By the stop of every month, the Income Sheet should have all the data it needs to summarize your bookkeeping for that menses. Make sure to keep the Income Sheets separated, organized past month.

You may want to make a copy of each one at the end of the calendar month, and either salve it or upload information technology to the cloud. Come up tax season, your auditor will need your income sheets for the year.

Advanced accounting in Excel

If you desire to get beyond bookkeeping and commencement agreement your finances in deeper ways within Excel, we recommend starting with pivot tables.

Pivot tables let you to visualize and summarize your bookkeeping info.

In our Income Statement template, we select Data > Summarize with Pin Table

Accessing Pivot Tables in Excel

Afterwards nosotros select all the categories we want to see summarized, here's what we get.

Pivot table example in accounting

This pivot table gives us a elementary summary of how much we spent from each vendor and how often we bought from them.

In that location's much more yous can exercise with pivot tables. If y'all desire to learn more, check out the Microsoft Function training page for pivot tables.

And if you just want some good erstwhile fashioned Excel tips to level up, cheque out this in-depth blog commodity from Hubspot.

Outgrowing DIY bookkeeping in Excel

If your business organisation keeps growing, yous'll eventually need to motility on from Excel.

Signs you're gear up for a bookkeeper:

Data entry - Manually entering and categorizing transactions for your books is starting to take up also much of your time. (This can happen when you start processing more than transactions per calendar month)
You lot decide to upgrade to double-entry bookkeeping
You make up one's mind to switch to accrual accounting
You need complex fiscal statements such as a Balance Sail or Greenbacks Menses Statement
You starting time working with an accountant, and they need admission to professionally kept books
You've but experienced a hectic tax season, and realize y'all need to exist meliorate organized for next year
You've experienced a phishing or malware attack on your business computer, and demand a more secure way to maintain your business records
You lot have accounting questions that can't be answered by searching online

Sound like you lot? Learn how to dump spreadsheets and outsource your bookkeeping.

What'south Bench?

We're an online bookkeeping service powered by existent humans. Bench gives y'all a dedicated bookkeeper supported by a squad of knowledgeable pocket-sized business experts. Nosotros're here to accept the guesswork out of running your own business concern—for good. Your accounting squad imports banking company statements, categorizes transactions, and prepares fiscal statements every calendar month. Get started with a free calendar month of bookkeeping.

This post is to be used for advisory purposes just and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business organisation counselor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information independent herein.