For many sole proprietors and small service businesses, yes. The IRS says you may choose any recordkeeping system suited to your business that clearly shows your income and expenses, and IRS Publication 583 (12/2024) calls single-entry bookkeeping the simplest to maintain. A ProfitDrawer bookkeeping spreadsheet works in Google Sheets or Excel with room for 1,000 income rows and 1,000 expense rows a year. Payroll or inventory usually needs accounting software.
A spreadsheet tends to be enough when:
- You are a sole proprietor or a small business with one or two owners.
- You have up to a few hundred transactions a year.
- You do not run payroll or track stock levels.
- You use the cash method and want income, expenses, profit and a tax summary.
It is less suited when you have employees, inventory, many accounts to reconcile, or an accountant who needs double-entry books.
To make a spreadsheet hold up:
- Keep the supporting documents (receipts, invoices, bank statements). The spreadsheet summarizes them; it does not replace them.
- Use fixed categories and one row per transaction.
- Protect formula cells so totals cannot be overwritten.
- Keep a backup copy, for example in Google Drive and as a downloaded Excel file.
- Reconcile your totals with your bank statement each month.
General information, not tax advice.
Source: Recordkeeping (IRS) · Updated
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General information, not tax, legal or financial advice. Check the rules for your state and your situation.