Bookkeeping
Bookkeeping spreadsheet: a free template mapped to Schedule C, and when you outgrow it
Build a small business bookkeeping spreadsheet the IRS way: the tabs Publication 583 describes, expense columns that match Schedule C lines, the 2026 mileage split, how long to keep records and the signs it's time for double-entry software.
Prepared by Aldro Accounting · Updated · Sources checked
The quick answer
A spreadsheet is an acceptable way to keep business books: IRS Publication 583 says that, except in a few cases, the law doesn't require any specific kind of records, only a system that clearly shows your income and expenses. A simple single-entry sheet built on the profit or loss statement works for many new businesses, while a double-entry system adds built-in checks and balances. Either way, receipts and invoices still have to back up each entry.
Can you keep your books in a spreadsheet?
Yes. The IRS says that except in a few cases, the law doesn't require any specific kind of records. You can choose any recordkeeping system suited to your business that clearly shows your income and expenses.
A spreadsheet is usually a single-entry system. Publication 583 describes single-entry bookkeeping as based on the income statement, recording the flow of income and expenses through a daily summary of cash receipts and a monthly summary, plus a check disbursements journal. It calls it the simplest to maintain and practical when starting a small business.
The catch is proof. The IRS cautions that proof of payment, such as a bank or card statement, doesn't by itself establish that you are entitled to a deduction. Keep sales slips and invoices showing you incurred the cost.
The template: tabs to set up
Publication 583 lists what a small business recordkeeping system might include: a business checkbook, a daily summary of cash receipts, a monthly summary of cash receipts and a check disbursements journal. The template below turns those into spreadsheet tabs, plus tabs for the items Schedule C asks about.
Scroll sideways to see all columns.
| Tab | Columns | What it feeds |
|---|---|---|
| Transactions | Date, payee or customer, description, category, income, expense, account, receipt link | Every other tab |
| Monthly summary | Month, total income, total by expense category | Schedule C Part I and Part II |
| Bank reconciliation | Statement balance, outstanding checks, deposits in transit, adjusted balance, book balance | Monthly check that books match the bank |
| Mileage log | Date, purpose, start, end, business miles | Schedule C line 9 and Part IV |
| Assets | Item, date placed in service, cost, business use | Depreciation and Section 179, line 13 |
| Contractors | Name, TIN from Form W-9, total paid | Contract labor, line 11, and Forms 1099 |
Start with a separate business checking account. The IRS says to open one when you start a business, keep it separate from personal checking and deposit all daily receipts in it. It calls the business checkbook your basic source for recording expenses.
- Running balance in column H: =H1+E2-F2, filled down
- Category total: =SUMIFS(F:F, D:D, "Advertising")
- Monthly income: =SUMIFS(E:E, A:A, ">="&DATE(2026,1,1), A:A, "<"&DATE(2026,2,1))
- Reconciliation check: adjusted bank balance minus book balance should equal zero
Expense categories that match Schedule C
Sole proprietors report on Schedule C, which is attached to Form 1040. Partnerships generally file Form 1065 instead. Using Schedule C's Part II lines as your expense categories means the year-end totals drop straight onto the form.
Business use of your home goes only on line 30, with Form 8829 unless you use the simplified method. Under the simplified method, the deduction is generally $5 times the square footage used for business, up to 300 square feet.
2026 numbers your sheet should handle
Mileage needs two rates in 2026. The business standard mileage rate was 72.5 cents per mile from January 1. The IRS then raised it to 76 cents per mile for expenses paid or incurred on or after July 1, 2026. Splitting the mileage log at June 30 keeps the math right.
To use the standard mileage rate for a car you own, you must choose it in the first year the car is available for business use. Schedule C Part IV asks for business miles and whether you have written evidence.
For payments made after December 31, 2025, the base threshold for reporting under section 6041(a) is $2,000, which is why the contractor tab tracks totals per person. For 2026, the Section 179 expensing limit is $2,560,000.
Your Schedule C profit also drives self-employment tax. Anyone with net earnings from self-employment of $400 or more pays it and files Schedule SE. The rate is 15.3%, with the 12.4% Social Security part applying to the first $184,500 of combined wages, tips and net earnings for 2026.
How long to keep the spreadsheet and receipts
Keep the files, and the receipts behind them, for the period of limitations that applies. If records are stored electronically in place of paper, the IRS says the storage system must index, store, preserve, retrieve and reproduce them in legible format, accessible to the IRS.
Signs you've outgrown the spreadsheet
Publication 583 notes the double-entry system has built-in checks and balances: total debits must equal total credits after journal entries are posted to the ledger, and if they don't, there's an error to find. A single-entry sheet has no such check.
If you move to software, the IRS rule is that a computerized system must produce legible records that support the entries on your return, and those records must reconcile with your books and return.
Aldro bookkeeping is the step after the spreadsheet: unlimited bank and card accounts, monthly reconciliation and statements for $20 a month.
- You need a balance sheet with assets and liabilities, not just income and expenses
- You carry inventory. When an inventory is necessary to account for income, an accrual method is generally required, though certain small business taxpayers can use the cash method
- You hire employees and need payroll and employment tax records kept at least 4 years
- You form a partnership, which generally files Form 1065 instead of Schedule C
- A corporation or partnership nears the $32,000,000 average gross receipts test for the cash method in 2026
- Monthly bank reconciliations stop matching, or take hours
Worked example
A sole proprietor drives 4,000 business miles from January through June 2026 and 5,000 from July through December. First half: 4,000 times 72.5 cents = $2,900. Second half: 5,000 times 76 cents = $3,800. The mileage tab totals $6,700 for Schedule C line 9. The same owner uses a 200 square foot home office, so the simplified method gives 200 times $5 = $1,000 for line 30. A 400 square foot office would be capped at 300 square feet, or $1,500.
Common questions
Does the IRS accept a bookkeeping spreadsheet?
Yes. Except in a few cases, the law doesn't require a specific kind of records. Any system that clearly shows income and expenses works, backed by receipts and invoices.
What categories should a small business bookkeeping spreadsheet use?
Sole proprietors can use the Schedule C Part II lines, such as advertising (line 8), car and truck (9), contract labor (11), office expense (18), supplies (22) and utilities (25).
What mileage rate goes in a 2026 spreadsheet?
72.5 cents per business mile for January through June, and 76 cents for expenses on or after July 1, 2026.
How long should I keep bookkeeping records?
Generally 3 years, 6 years if more than 25% of gross income was left off, 7 years for bad debt or worthless securities claims, and at least 4 years for employment tax records.
Single-entry or double-entry bookkeeping?
Single-entry is simplest and works for many new small businesses. Double-entry adds built-in checks and balances, because debits must equal credits.
The cheapest way to get your business taxes done: $399 flat.
Business tax filing is $399 USD a year, and it covers everything tax for that year.
How it works
- Tell us about your business. A two-minute form. No payment is collected through it.
- Get your next steps by email. We’ll email you the next steps within one business day. After you sign up we’ll send you a secure upload link for your documents.
- We file it. Our team prepares and files your return. Add bookkeeping for $20 a month if you want it.
What's included
$399 a year covers everything tax for that tax year.
- Every business return for the year. All the federal and state or provincial business returns you need for the tax year: Schedule C, 1065, 1120-S, 1120 and their state returns in the US; T2, or T1 with T2125, in Canada.
- More than one state. Multi-state returns are included at the same price.
- Your personal return. The owner’s personal return (1040 or T1) is included when it’s needed for the business income.
- Quebec. Quebec returns (CO-17, TP-1 and TP-80) are included. Our Quebec pages are in French, and our team works with you in English.
- Extensions and reminders. Extensions (Form 7004 or 4868) and quarterly estimate reminders are included.
- Information returns. 1099-NEC, T4/T4A and T5018 slips are included in the tax price.
- City and excise returns. City and local business tax returns, and state excise returns such as Washington B&O, are included in the yearly price.
- Franchise tax reports. State franchise tax reports, such as the Texas franchise tax report, are included.
- Estimated tax and instalment amounts. We work out your quarterly estimated tax payments in the US, or your CRA instalments in Canada, and tell you what to pay and when.
- Unfiled past years. Each unfiled prior-year return is $399 per tax year, the same flat price.
- Bookkeeping at $20 a month. Unlimited bank and card accounts, monthly reconciliation and monthly statements.
Basic inventory tracking for online stores, such as Shopify, is included. Full cost-of-goods reconciliation is quoted separately. Payroll processing and sales-tax filing aren’t included in bookkeeping. Prices are in USD. Our team prepares and files your return.
Sources
- IRS: Publication 583 (draft 12-2025) · checked October 31, 2026
- IRS: Schedule C (Form 1040) 2025 · checked October 31, 2026
- IRS: 2026 business standard mileage rate · checked October 31, 2026
- IRS: Internal Revenue Bulletin 2026-29 · checked October 31, 2026
- IRS: Rev. Proc. 2025-32 · checked October 31, 2026
- IRS: Self-employment tax · checked October 31, 2026
This guide explains general rules from the sources listed. It isn’t tax advice for your situation.