Question: You’re going for your daily jog—do you wear the old skateboard shoes you’ve had since grade 10 or the new jogging shoes that make you feel like you’re floating on a cloud? You know the answer. (And your knees do, too.)

The same goes for your finances. You could stick with the tool you’ve been using since your first Computer Applications class—a spreadsheet—or you could try something else: a solution millions of business owners turn to when their spreadsheets just can’t keep up. You guessed it: accounting software.

Wondering if easy-to-use accounting software like Wave’s is right for you? We’ll break down the pros and cons of both spreadsheets and software so you can choose what works best for you and your business.

Why the right financial tool matters for your business

Your invoices are stacking up, your expenses are multiplying, and—what’s that? Ah, tax season is just around the corner. If reading that gives you heart palpitations, then it might be time to explore an alternative to spreadsheets.

As a small business owner or freelancer using spreadsheets, the above scenario is all too common. But as your business grows, you need tools that will grow with you, saving you time and money. No more mistakes from typing too fast, formatting a column, or (not) mastering a PivotTable. It’s time for quick, correct, and effortless.

Enter accounting software. Accounting software like Wave’s works with you as you scale your business and your finances. Here’s what that can look like:

• Cumbersome tasks like bookkeeping, reports, and reconciliation are automated
  
• The risk of human error is greatly reduced because you’re not the one doing the math or plugging in the formulas and functions
  
• Reports that actually sense are provided so you can make the right decisions as you continue to grow

Sounds too good to be true? It’s not—it’s just not a spreadsheet.

What’s the difference between spreadsheets and accounting software?

You probably learned spreadsheets in high school, and unlike your hairstyle back then, they haven’t changed much. Simple, manual, and customizable—kind of like a flip phone. But no matter how you dress it up, it can only take you so far before it becomes more work than it’s worth.

That said, for small businesses or freelancers with only a few transactions, spreadsheets can do the job, as long as you’re there doing the work. Every update and calculation is on you, which can get messy and time-consuming once your business starts to grow. And when that happens, accounting software is there to save your sanity.

Accounting software like Wave’s feels like finally upgrading to a smart phone. You get to scale up while also dropping the to-do’s of yesterday. It’s built to manage finances efficiently and automatically, keeping track of expenses, sales, and profits, then serving up ready-to-use reports like income statements and balance sheets. Wave even safely and securely connects to your bank accounts and payment platforms, cutting down on manual data entry.

The result? Automatic transaction syncing, invoicing, and easy tax reporting is done for you so you can focus on adding to your business, not your spreadsheet.

When to switch from spreadsheets to accounting software

When you know, you know.

And no, we’re not talking about love. We’re talking about a close second: making the switch to accounting software.

But in case you’re not getting the butterflies that come with the feeling of commitment, here are a few indicators that can help you make your next move.

You’re spending too much time on data entry

If you’re all too familiar with spreadsheets, you know the frustration (and let’s be honest, the mind-numbing boredom) of manually entering data. But in addition to the work being tedious, it’s also prone to errors—ones that can snowball into inaccurate reports, missed insights, and costly headaches down the road. Especially at tax time.

But with accounting software, data entry is automated, freeing you up to focus on the parts of your business you actually enjoy. And those mistakes and missed insights? Wave’s accounting software gives straightforward reports that make it easier to understand your numbers and run your business with less stress.

‍Pro Tip: Look for software that automatically imports transaction data when you connect your bank accounts to their platform. Or just look to Wave’s Pro Plan 👋

Your business is growing

Congrats—your business is growing! More clients, more products, more staff, and—drumroll, please—more financial transactions to manage and less time to do it.

Accounting software can help as you scale. The right accounting software, that is. Look for one with robust reporting features that can keep up with your growth. It takes on the added complexity without breaking a sweat, so you can stay focused on running your business.

You’re struggling with financial reporting

More of a marketing wizard than a spreadsheet savant? Totally understandable. Generating accurate reports from spreadsheets can be tough, and often involves complex formulas that look like they belong on a chalkboard at MIT that only a mathematical genius disguised as a janitor can figure out. (Movie trivia, anyone?)

But with accounting software, you don’t have to worry about formulas. Depending on your software, your financial reports will be provided to you, giving you all the up-to-date insights you need.

Pro Tip: Look for software that doesn’t just give you reports like profit and loss statements, balance sheets, and more—but automatically generates them and doesn’t require a business degree to understand.

You need more accurate tax preparation

Even if you’re naturally organized, manually tracking deductions, sales tax, and other obligations is time-consuming, which means mistakes (or missed savings) can easily slip through those spreadsheet cracks.

With accounting software, your expenses get categorized automatically and tax-ready reports are just a click away.

‍Pro tip: Choose software that integrates with tax filing platforms (like H&R Block) to make filing even smoother.

You want better collaboration with your accountant

Who enjoys never-ending email threads and wading through file links with their accountant? Exactly.

Sending documents back and forth is a major headache and can lead to mistakes and missed opportunities.

With accounting software, collaboration is simple and seamless. Your accountant can jump into the same real-time data you see—so nothing gets overlooked, and everything gets caught.

Pro tip: Opt for software like Wave that allows multi-user access and integrates with the tools tax pros already use.

Pros and cons of using spreadsheets for business finances

If you’ve made it this far, you might be expecting this list to lean heavily on the cons. Fair enough—spreadsheets do have their drawbacks. But let’s give credit where it’s due: there are a few pros worth mentioning.

Pros of spreadsheets

• Free: You don’t pay for software, which makes spreadsheets appealing if you’re just starting out.
  
• Customizable and flexible: You can set them up exactly how you like: formulas, formats, color coding, the works.
  
• Helpful for (very) small businesses: Dealing with just a handful of transactions each month? Then a spreadsheet might just do the trick.

Cons of spreadsheets

• Time-consuming: Updating formulas, entering data, and managing financial reports can eat up valuable hours you could spend on, well, anything else.
  
• Prone to human error: We all make mistakes, but even a single typo, miscalculation, or a missing row can throw off your entire spreadsheet and reports.
  
• No automation or integrations: Unlike software, spreadsheets aren’t as collaborative with your bank, accountant, or your tax tools. That means you’ve got to do the heavy lifting—and by heavy lifting, we mean emailing files upon files upon files.
• Hard to scale:  Sure, spreadsheets work well for a side hustle, but as your business grows with more clients, products, and transactions, they can quickly become overwhelming and difficult to manage.

Pros and cons of using accounting software for business finances

Just like the pros and cons of using spreadsheets, accounting software also comes with its own set of yays and nays. Here are a few in more detail.

Pros of accounting software

• Automation saves time and reduces errors: Categorizing expenses? Reconciling transactions? Routine tasks like those happen automatically when you use accounting software, so you spend less time in the tangly weeds of spreadsheets, all while avoiding costly mistakes.
  
• Accurate financial reporting and tax preparation: Worried about making mistakes from your manual entries? Don’t be. With accounting software, reports like balance sheets and income statements are generated for you, helping you stay on top of your numbers and always ready for tax season.
• Scales with your business: More clients, products, and transactions? No problem. Whether you’re a growing side hustle or full-grown business, the right accounting software is able to adapt to your changing needs.
  
• Seamless integrations with banks, payments, and tax platforms: Pick accounting software that plays nicely with the tools you already use, and your accounts will sync up in real time. So go ahead and close a few of those tabs. Your days of juggling data entry with triple-checking numbers are long gone.‍
• Cloud-based for easy access anywhere: Ever tried managing a spreadsheet on your phone while waiting in line at the bank? No matter how hard you try to multitask, spreadsheets just aren’t built for on-the-go work. Luckily, accounting software is. Log in from your laptop or phone at home, on the go, or even on vacation (but seriously—take that vacation!) and always have the latest numbers at your fingertips.

Cons of accounting software

• Subscription cost: Most accounting software comes with a monthly fee, though those fees are designed to work with the financial needs of small business owners.
  
• Learning curve: Some users may need time to get comfortable with all the features. Pro tip? Look for accounting software that’s known for its advisors and support tools.
• ‍Less customizable than spreadsheets: You won’t have every single option a spreadsheet gives you, but most software still lets you tweak it to fit your business and keeps up as things grow. And that’s worth all the bonus points.

How to make the switch: A step-by-step guide

Realized that your business is just too big to fit in a spreadsheet? Then you’ve come to the right place. Here’s how to make the switch from spreadsheets to software.

Step 1: Analyze your current situation

Review your current bookkeeping process and identify pain points. Ask yourself: Are you spending too much time on data entry? Are you experiencing difficulty generating reports?

Step 2: Research accounting software options

Compare options like Wave, QuickBooks, and Xero to find the one that suits your business needs. Read reviews, threads, and any other forum that will give you insight on key things like ease of use, pricing, and features.

Step 3: Migrate your data

Time for the big move! Gather your financial data including income, expenses, invoices, then import it into your chosen accounting software. P.S. Most software will offer import tools or CSV file upload options.

Step 4: Set up automation

Now that you’re using accounting software, it’s time to take advantage of one of its best parts: automation. Set up recurring invoices, automatic bank feeds, and automatic categorization for expenses to streamline your new-and-improved accounting process.

Step 5: Train yourself and your team

You’ve got the software, and now you’ve got to learn how to use it. Spend time learning its ins and outs to make sure you’re maximizing its features. Many platforms, including Wave, offer Oscar-worthy tutorial videos and 5-star customer support. (So no excuses.)

Wave’s accounting software: The best solution for small businesses

If you’ve decided to move forward with accounting software, it’s now time to choose which one. We’ll help you get started.

By choosing Wave, you’re choosing software that’s free, easy-to-use, and specifically designed for small businesses and freelancers. And remember those integrations we talked about earlier? We offer those, along with automated features and tax reporting.

Wave also gives you peace of mind by streamlining accounting tasks and reducing errors, so you can rest easy knowing that your DIY spreadsheet won’t come back to haunt you at tax time.

Ready for a much-needed upgrade to your bookkeeping? Get started with Wave today and experience the power of accounting software—starting at free.

Jump out of the sheets and into accounting software

Still on the fence? Here’s a quick recap to help you make the leap.

Spreadsheets work for simple operations, but once your business starts to grow, accounting software gives you automation, accuracy, and scalability. Tax time also becomes way less stressful, your books stay organized, and best of all? You actually get to enjoy running your business—finances and all.

Don’t let bookkeeping slow you and your business down. Make the switch today and see how easy accounting can be.