QuickBooks vs Excel: Which Should You Use for Your Books? (And a Third Option)

If you’re exploring tools to help you manage your books, Excel and QuickBooks are probably on your radar. Both can help you manage income and expenses, but they work in very different ways. 

Excel is a widely used, general-purpose spreadsheet tool that can be a good option for basic bookkeeping, budgeting and financial tracking. QuickBooks, on the other hand, is accounting software that’s a better fit for businesses tackling more complex financial needs, such as managing invoices and generating financial reports. 

So which one is better? That all depends on how complex your finances are, what you want the tool to help with, and how much time you’re willing (and able) to spend managing your books. 

In this guide, we’ll take a deep dive into the debate of QuickBooks vs Excel, exploring their upsides, their downsides, and who’s a good fit for each option. We’ll also take a look at a third option that’s worth considering when neither QuickBooks nor Excel is the right fit for your organization.

QuickBooks vs Excel: A Quick Snapshot

QuickBooks and Excel can both be used for bookkeeping. But they’re very different in terms of how they work, how much they cost, and how easy they are to learn and use. 

Here’s a snapshot of how Excel vs QuickBooks compare. We’ll take a closer look at these differences later on in this post. 

Feature	QuickBooks	Excel
Best for	Small or medium-sized businesses with more complex accounting needs	Individuals and small organizations that only need basic bookkeeping
Cost	Free version with limited features and users; paid subscription with multiple pricing tiers	Free web version available; desktop and advanced features may require payment
Learning curve	Steep, especially for people without accounting experience	While Excel is familiar to many users, creating and maintaining bookkeeping spreadsheets does take some skill
Multi-user access	Multiple users with role-based permissions; number of users depends on the plan selected	Real-time collaboration through OneDrive or Microsoft 365
Financial reports	Built-in financial statements and reports	No ready-made accounting reports; users must create them using formulas, templates, or other tools.
Audit trail	Built-in audit log in QuickBooks Online	Version history and change tracking available in some versions; no formal audit trail
Transitioning the books to a successor	Cloud-based record storage and user permissions make transitions easier	Depends on how files are set up, maintained, stored, and shared

The right option depends on what accounting tasks you want the tool to help manage and how much of the bookkeeping process you’re willing to build and manage on your own. 

If you have basic bookkeeping needs and plenty of time to set up and maintain spreadsheets, Excel might be a good option. But if your business has more complicated finances, you need tools to manage different financial responsibilities, and you’re looking to save time, QuickBooks is probably a better fit. 

What is QuickBooks?

QuickBooks is well-known accounting software that’s mainly focused on the needs of small and medium-sized businesses. The platform includes tools to help manage finances, track income and expenses, and keep the books organized and up to date, all from one place. 

Some of the key accounting features of QuickBooks include: 

• Income and expense tracking: Connect bank accounts and credit cards to automatically import and categorize transactions.
• Invoicing: Create and send invoices, track outstanding payments, and send payment reminders.
• Bill management: Keep track of bills, due dates, and payments to vendors.
• Bank reconciliation: Match transactions with bank statements to help keep financial records accurate.
• Financial reporting: Generate reports such as profit and loss statements, balance sheets, and cash flow statements.
• Multi-user access: Give employees, bookkeepers, and accountants access to financial records, with permissions based on their roles.

The fact that QuickBooks offers so many features can be beneficial for businesses that will actually use them. But at the same time, all those features can make QuickBooks more difficult to learn, especially for someone who doesn’t have formal accounting experience. 

There are multiple versions of QuickBooks available, including the cloud-based QuickBooks online. 

What is Excel? 

Microsoft Excel is a spreadsheet program that’s widely used for everything from building and tracking budgets to analyzing data. It’s a general-purpose application rather than an accounting tool. Yet, many individuals and small organizations use it to manage their books because it’s familiar, flexible, and less expensive than other options. 

Excel includes many features that can be useful for managing the books, including:

• Income and expense tracking: Record financial transactions and organize them into categories using customized spreadsheets.
• Budgeting: Create budgets and track income and spending against them. 
• Formulas and calculations: Automatically calculate totals, balances, and other financial figures using built-in formulas.
• Financial reporting: Use tables, charts, and formulas to create visual financial summaries and reports.
• Templates: Start with prebuilt bookkeeping and budgeting templates rather than starting from scratch. 
• Collaboration: Share spreadsheets with others responsible for financial management and work from the same file using OneDrive or Microsoft 365.

Excel is available as a free web-based application. Desktop versions and certain features are only available with a paid subscription or license. 

Excel can be a practical and affordable option for individuals and small businesses with simple bookkeeping needs. But going this route can be a major time commitment because users must set up and maintain spreadsheets on their own. Plus, spreadsheets get outdated quickly, which makes it hard to get an accurate, real-time picture of your finances.

QuickBooks vs. Excel: 5 Notable Differences 

Now that we’ve covered what QuickBooks vs Excel are, let’s take a closer look at some of the key differences to consider when deciding which is right for you.  

1. Bookkeeping and accounting capabilities

When comparing Excel vs accounting software like QuickBooks, one of the biggest differences is how much of the bookkeeping work each tool can handle for you.

QuickBooks has plenty of accounting features that can help businesses track income and expenses, manage invoices, reconcile bank accounts, and create financial statements. The platform can also import transactions from connected bank accounts, which means less time spent on data entry. 

Excel is more flexible, but it requires more hands-on work. You can use spreadsheets to manage transactions and organize financial information in whatever way works for your business. But setting up and maintaining your own bookkeeping system can take up a lot of time, even if you’re starting from a template. 

If your organization only needs basic bookkeeping, Excel could be enough. But as your transaction volume grows, QuickBooks can make financial management much easier. 

2. Costs

Microsoft offers a free web-based version of Excel with basic functionality. Desktop versions and advanced features require a paid Microsoft 365 subscription or software license, which some businesses are already paying for.

QuickBooks offers a free plan with limited features for those who are self-employed. There are also several paid plans available for everyone from single-person ventures to larger enterprises. Costs depend on the features that are included and the number of users. 

Excel may less expensive, especially if your business is already paying for a license. But you also need to factor in the time you’ll spend setting up your bookkeeping system, keeping your spreadsheets up to date, and creating financial reports. QuickBooks’ automated features could save you a significant amount of time, which could be worth the extra expense. 

3. Learning and using the software

Many people already use Excel for other purposes. So if you’re already familiar with how to key data into a spreadsheet and use basic formulas, you can probably spin up a simple income and expense tracker without much trouble. 

That said, building and maintaining a bookkeeping system in Excel can be more challenging. You’ll need to understand how spreadsheets are organized, make sure every formula is always working the way it’s supposed to, and keep financial information up to date. 

QuickBooks tends to come with a steeper learning curve, especially for those who haven’t managed the books before and aren’t very familiar with accounting concepts and jargon. But once the system is set up, many routine bookkeeping tasks can be automated.

In short, Excel may be easier to start with, but once you get up and running, QuickBooks can make it easier to manage the books.

4. User-access and collaboration

At many organizations, there are multiple people involved with bookkeeping. So it’s important to consider how QuickBooks vs Excel support multi-user collaboration. 

Some QuickBooks Online plans support multiple users, with role-based permissions that vary by plan. For example, the Simple Start plan for small businesses supports one user, with access for two accountants. The Advanced plan provides access to 25 users, with access for 3 accountants. Business owners can grant users access to the information they need for their role, without sharing full control of the account. 

Excel also allows multiple people to collaborate. If you store a spreadsheet in OneDrive or SharePoint, multiple people can access and edit it, even at the same time. 

That said, Excel doesn’t offer accounting-specific user permissions like QuickBooks does. Organizations also need to be careful about storing and sharing spreadsheets. If financial records are spread across computer desktops, email attachments, or multiple file versions, it’s tough to know which information is accurate.

5. Financial reporting, accuracy, and recordkeeping

QuickBooks and Excel can both be used to create financial reports, but QuickBooks requires much less hands-on work.

In QuickBooks, users can run several different types of reports such as profit and loss statements, balance sheets, and cash flow statements. These reports pull directly from transactions in the system, so there’s no need to create formulas or manually cobble together the data.

Excel can also be used to create financial reports, but you’ll need to build them yourself or find a template to suit your needs. Starting from scratch gives you flexibility over how information is presented, but it also increases the likelihood of errors. A broken formula, missing transaction, transposed number, or accidental change can all impact the accuracy of your financial reports. 

QuickBooks Online also includes an audit log that tracks changes made to financial records. Excel offers version history and change tracking in some environments, but this isn’t the same as a dedicated accounting audit trail.

For businesses that need consistent reporting and a clear record of financial activity, QuickBooks is typically a better fit. 

Should I Use Excel or QuickBooks for Bookkeeping?

While there are several clear differences between Excel and QuickBooks, choosing the right option isn’t always easy. It all boils down to how complicated your finances are and what bookkeeping tasks you want the tool to help you manage.

QuickBooks may be the best choice if you:

• Run a business with a lot of financial transactions.
• Need to manage invoices, bills, and payments.
• Want to save time by automating tasks like importing transactions and generating financial reports.
• Have multiple people involved with managing the books.

Excel may be all you need if you: 

• Have simple bookkeeping needs and a relatively low number of transactions.
• Want an inexpensive way to track income and expenses.
• Are comfortable working with spreadsheets and formulas.
• Don’t need advanced accounting features.
• Have time to build and maintain spreadsheets. 

Sometimes neither Excel nor QuickBooks is the right fit for an organization. In those cases, it’s worth considering a third option.

What’s the Best Accounting Tool for Clubs, HOAs, PTAs, and Other Volunteer-Run Organizations? 

When volunteer-led organizations start looking for a tool to manage the books, many opt for Excel. It’s familiar, affordable, and flexible enough to handle basic bookkeeping tasks. 

But when the treasurer who built the spreadsheet steps down, Excel often loses its appeal. 

In many cases, an incoming treasurer is left to decipher a spreadsheet built by someone else, with formulas and organization methods that don’t seem to make sense. If the outgoing treasurer saved the file on their computer or account, their successor may not be able to access it at all. The new treasurer must build their own system from scratch, a pattern that repeats every time a new treasurer steps in.

Some volunteer-led organizations get frustrated with Excel and decide to switch to QuickBooks. QuickBooks can help them centralize their financial records, tackle accounting tasks, and collaborate with others. But at the end of the day, QuickBooks is built for businesses, not volunteer-led groups like HOAs, PTAs, and clubs. It’s loaded with features that volunteer treasurers won’t use, which makes it more complicated and costly than most HOAs, PTAs, and other volunteer-run organizations need. 

When Excel and QuickBooks aren’t the right fit, there’s a third option that may be just what you need: accounting software that’s purpose built for volunteer-led organizations.

MoneyMinder is accounting software built specifically for volunteer treasurers. It offers tools to help volunteer-led organizations track income and expenses, build and manage budgets, collect dues and payments, and generate financial reports. It’s easy to use, even for treasurers without formal accounting experience. And it offers straightforward pricing with no extra fees for setup, support, or adding users. 

The platform supports multiple users with role-based permissions to make collaboration easier. When a new treasurer steps in and is granted the right permissions, they can access accurate, organized financial records right from the start. 

Which Accounting Tool is Right For You? 

Excel can be a good option for organizations with simple bookkeeping needs, while QuickBooks is often a better fit for organizations with more complex finances and more accounting tasks to manage. PTAs, HOAs, clubs, and other volunteer led-organizations may want to explore a third option: purpose-built nonprofit accounting software.

If your volunteer-run organization is using QuickBooks, learn more about switching to purpose-built accounting software. Or, check out our straightforward pricing to see if MoneyMinder is a better fit for your needs and your budget.