How to Create a Simple Bookkeeping Spreadsheet for Your Business

Bookkeeping is an essential part of running a business. Without accurate bookkeeping, it is impossible to know the financial health of your business, make informed decisions, or file taxes correctly. While there are many bookkeeping software options available, they can be expensive and overwhelming for small business owners. In this article, we'll walk you through the steps to create a bookkeeping spreadsheet from scratch.

Alternatively, if you want to save time, simply buy our professionally designed Small Business Bookkeeping templates to hit the ground running for your business. I'll shamelessly plug them below :)


1. Introduction

Bookkeeping can be a daunting task for many small business owners, but it doesn't have to be. By creating a simple bookkeeping spreadsheet, you can keep track of your income and expenses, monitor your cash flow, and stay on top of your financials without breaking the bank. In this article, we'll guide you through the process of creating a simple bookkeeping spreadsheet for your business.

2. Understanding the Basics of Bookkeeping

Before you start creating your bookkeeping spreadsheet, it's important to understand the basics of bookkeeping. Bookkeeping is the process of recording and organizing your business's financial transactions, including sales, purchases, payments, and receipts. By keeping accurate records of these transactions, you can track your business's cash flow, monitor your expenses, and prepare for tax season.

3. Choosing the Right Spreadsheet Program

The first step in creating a simple bookkeeping spreadsheet is choosing the right spreadsheet program. While there are many options available, Microsoft Excel and Google Sheets are two popular choices that are user-friendly and affordable. Both programs offer pre-made templates and formulas that can make bookkeeping easier, and they are compatible with a variety of devices.

4. Setting Up the Spreadsheet

Once you've chosen your spreadsheet program, it's time to set up your spreadsheet. Start by creating a new document and labeling it with the current year. Next, create columns for the date, description, income, and expenses. You can also create additional columns for categories like taxes or payroll, depending on your business's needs.

5. Creating the Chart of Accounts

The next step in creating your bookkeeping spreadsheet is creating a chart of accounts. A chart of accounts is a list of all the categories you'll use to track your income and expenses. Some common categories include sales revenue, cost of goods sold, advertising expenses, and office expenses. Creating a chart of accounts will help you organize your financial transactions and generate accurate reports. You can also think of this as the ‘Setup’ tab of your spreadsheet.

6. Entering Income and Expense Transactions

Once your spreadsheet and chart of accounts are set up, it's time to start entering your financial transactions, for both Income and Expenses. Be sure to include the date, description, and amount for each transaction, as well as the appropriate account category. If you live in a country where the sales tax of items purchased for business purposes is returned to you, don’t forget to keep track of the tax amount you have paid.

7. Creating Reports

One of the biggest benefits of using a bookkeeping spreadsheet is the ability to generate reports. You can use your spreadsheet to create reports like profit and loss statements. These reports can help you understand the financial health of your business, identify areas where you can save money, and prepare for tax season. I suggest creating Annual and Monthly Overview reports.

8. Annual Overview Report

To create an annual overview report in your bookkeeping spreadsheet, you can use the SUMIFS function to calculate the total income and expenses for each month of the year. Then, you can create a chart or graph to display the data visually. This will give you a clear picture of your business's financial performance over the course of the year.

9. Monthly Overview Report

Monthly overviews are different from annual overviews in that they provide a more granular view of your business's financial performance on a month-to-month basis. Use a similar approach to create your monthly overview. Add a drop down so you can easily choose which month you’d like to deep dive into your business.

10. Tips for Maintaining Your Spreadsheet

To ensure that your bookkeeping spreadsheet stays accurate and up-to-date, it's important to maintain it regularly. This means entering transactions on a regular basis, reconciling your numbers at least once a month, and reviewing your financial reports regularly. It's also a good idea to back up your spreadsheet regularly to ensure that you don't lose any important data.


Rather than purchasing expensive bookkeeping software, creating a simple bookkeeping spreadsheet is an easy and affordable way to keep track of your business's financial transactions.

If you want to save time and not create your spreadsheet from scratch, simply buy our professionally designed Small Business Bookkeeping templates that are used by many other small business owners like yourself!

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