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Bill ledger template for NPOs

you know accounting software is surprisingly expensive and so you might wonder yourself why can't i just do this all in excel you know there my name's philip wong i'm an accounting teacher and i have developed an accounting system which is developed entirely in excel i'm going to give it away entirely for free the download link is of course in the description now the one thing about excel is that it's really easy to use it's fantastic but there is a problem it thinks in well rows and it thinks in columns this makes it really easy to track income and expenses let's say that we have some business transactions here i could just hit auto sum boop and that gives me a total of five thousand dollars net change over this period but if i just have rows and columns i'm not really keeping track of my assets and my liabilities who what do i have in stock and who do i owe money to those sorts of things are a domain of debits and credits in full-blown double entry accounting systems and excel doesn't naturally do this very very well so if you have a look at my new accounting system you will see that this system follows the basic steps of accounting now when you download my software you'll find that there are three files one of them is basically a poster that teaches you the basics of accounting in some very friendly formatted and colorful ways the other two files are the actual accounting system themselves one of them has some example data in it and the other one is largely blank this is the actual file you'll be working on now the accounting system here uses five basic colors which i will explain in a moment and you will see that the basic accounting process follows this whole thing about events journals ledgers trial balances and financial reports now the one thing i don't like about quickbooks xero myob or other small business accounting softwares is that they pretend that in just 30 minutes you as somebody who's got no idea about accounting can basically mind your own business myob it's there in the name but i'm an accounting teacher and i don't believe that and you'll actually see that this little open model here allows you to learn accounting as you go as indeed you account for your own books so you'll notice that the tabs i have down here chart of accounts open trial balance general journal general ledger trial balance income statement and balance sheet these follow the accounting process steps so by using the software you're actually learning the basics of accounting and of course when you get good at this system you may wish to actually upgrade to a paid system that's okay but this is a great system to learn accounting and it's certainly enough to carry a micro business who's in the very first startup stages and doesn't want to spend the money it's good enough for a community group church group or something like that and it's certainly a perfect tool for teachers and students to learn the basics of accounting okay so that's the five basic steps of accounting let's see how i have implemented these in my little accounting software we're going to start off by having a look at the example data there are only four areas where you can change anything in this setup page for the moment most things are locked off because as i'm developing the software those functions will become available in the future i hope to have companies trusts and other types of businesses but for the moment i've just kept it simple and i've just got available a sole trader you can change your business name you can set up the owner's name and you need to set up the dates for which this file is going to be available for you can set up your business to run your accounts as frequently as you like some people like to run them monthly i'm going to run this quarterly say here from april may and june it depends on how frequently and how much volume you have in your business we're just going to do this for a quarter here next you go to the chart of accounts you'll see here that these are color coded that is not a mistake you see there are five basic elements to accounting i color code these for my students to make it really fundamentally easy to understand how and why we are doing journal entries i use blue for assets because well oftentimes we're talking about liquidity i use red for liabilities because credit is the lifeblood of business also there is a saying in english to be in the red when you owe money there is another saying in english to be in the black and that represents equity and i also use black here because well think of leather and luxury the owner of the business is trying to make themselves wealthy building capital is after all the whole point of capitalism i use green for income because well think of green growth or maybe hundred dollar bills and what's the opposite of green growth think of autumn leaves or rust color expenses things that eat away at the owner's wealth these five elements form the very fundamental of accounting and as you can see here the total of the assets plus the expenses for the period will be equal to all the liabilities plus the equity plus any income all the items on the left the assets and the expenses are ordinarily known as debit accounts and all the items on the right are ordinarily going to be credit accounts unlike quickbooks xero and nyob i actually expect that you understand the debits and credits in order to use this software and this software and my series of videos will teach you how so the first thing is to go through all of these accounts and change them to whatever would suit your business i have set up this business based on myself where i run a youtube channel you probably don't run a youtube channel so you probably won't have an asset called video equipment you probably won't have expenses such as studio rent expense instead you would go ahead and change all of these accounts to be representative of your business you'll notice that if you enter in a new account say for example stock at call a number here will automatically appear but of course you could change this number to any other number if you wish i'm just going to add an account called merchandise and that's account 105. and you can see that in the opening trial balance we have this 105 merchandise but there's no value in it because we've just set it up these other numbers here that are in the opening trial balance well basically i've been running my business for several well who knows how long but certainly before the 1st of april 2022 whatever i had at the close of last period i'm going to have as the opening balances for the beginning of this period if i scroll down here you'll see that the income values are well zero and of course all the expenses are zero and that's because at the beginning of the period well nothing's happened yet i haven't sold anything and i haven't spent any money just yet but i do have some assets and i do still owe some money i can then go to my general journal and start entering in all the changes that have occurred over the period for example i may have paid some studio rent expense and paid that out of the bank account you can see here that with the journal journal we have a row count which is basically just a count there's nothing special about that a reference number or a journal journal reference number a date accounts post references those are grayed out because you can't change those there's a lot debit and credit value and a narration now i recognize that most the time when you learn accounting by hand in either a high school or university we will teach you to put the narrations underneath the account here but i've had to kick it off to the right here because excel makes it difficult to put different values in different columns so let's say that we've bought some merchandise we need to have a general journal reference it'll be the next general journal reference up with last one was 13 so we can write 14. no need to write the gj it happens automatically let's say that we happen to do that on the next day after the last entry we've got some new merchandise you can press alt down to get to the drop down menu or of course you can just use the mouse and merchandise is a current asset so it'll be up the top and i will have paid for this using the bank account so i can just click on cash it bank i don't know perhaps we built four hundred dollars worth of merchandise so four hundred dollars of merchandise is an asset that's increasing and cash it bank went down by four hundred dollars because i paid it out of the bank bought some new merch that sounds good next if you go to the general ledger you'll notice that well there are a lot of these scroll scroll scroll let's zoom out so you can actually see just how many there are in fact each one of these things here is a ledger and we have as many ledgers as we have accounts yeah every single account here will have a corresponding ledger to it you'll see that the largest space here is set aside for the cache at bank and that makes sense because well that ledger is being accessed all the time but other things such as uh such as vayne finance loan well i might only pay my my loan off once a period or in this case it's a quarter so maybe i paid it off once a month that would be three times over that period i just don't need as many lines in that ledger the really neat thing here is because i've already put cache at bank here when i go into the ledger that has been automatically posted and this is the magic of the software that i'm developing here you can see it happened on the 27th the general journal reference was 14 so that when i go back to my journals i know that if i look at 14 here is that here is the entry where it happened and that the corresponding 400 went to merchandise so if i scroll down to merchandise where is it merchandise four hundred dollars you can see that it has been posted correctly you can go to the closing trial balance on this tab here and you'll see that in fact we have both the opening trial balance and also the closing trial balance next to each other so this is neat because the opening trial balance here is literally copy pasted from the opening trial balance here it's just that you now have an easy way to compare them and one minus the other gives us a net change up or down next you can go to the income statement and balance sheet and while some areas here are locked off you'll find that quite a few of these can be changed as we go for example if your business does not use cost of goods sold you can simply delete that line and let's say that you can see the bank fees to be well they actually are operating revenue items so they shouldn't be here i could just simply hit delete on bank fees and ah i've already got it here and that value can come from the trial balance the closing bank fees bank fees bank fees bank fees ten dollars there we go so i've moved it from non-operating revenue into operating expenses so businesses are a little bit different some have cost of goods sold some don't some want to count for operating expenses separate of all the non-operating expenses i've given you the flexibility to make some changes here not everything is locked down same thing goes to the balance sheet as well you can make a few changes here but by and large it's locked down so that it's fairly clear as to what you should be able to do here okay so that is the accounting software system as you can see this is mostly designed for instructors it is actually the educational version that you're looking at right now but in future i hope to offer a commercial version which of course i will still make for free it would be useful for very micro businesses and community clubs i want to have a csv import feature so that you can take your bank records and code them up reasonably i want to expand out the journal lines you see general journals of say a hundred lines well that's tons if you're in an education setting for a classroom but of course businesses will need more than that i've already included the narrations i'll have a feature here to allow you to generate small basic invoices i may even allow for gst abn reporting and all sorts of other fun things so what do you think if you find any bugs simply click on on this red button here and report bugs or tell me about any features that you would like to see implemented my name is philip wong i hope this has been really helpful if you've got any comments or questions or queries please find me on facebook and let me know because i've been working on this little system for a little while here and i think it's pretty neat because we're really stretching the limits of what can be done with excel especially given the fact that this has no macros in it so it can be used on excel for web on excel for macintosh and excel for ios unfortunately it's not playing so well with google sheets i'm aware of that and unfortunately you do need to have microsoft excel 2009 or above in order to run it because i've got some cool functions underneath the hood but hey it's free and honestly buying excel is a lot cheaper than buying xero or myob my name is philip wong i hope you find this helpful all the best folks