Should You Do It Yourself or Not?
Whether you do it yourself or not, the bookkeeping needs to be done. You have to keep your budget straight to succeed in any business. If you don’t do it, you’ll screw up your tax returns and spend more money than you make. Poor money management is one of the top four reasons why businesses fail. Just look at how it sank these huge businesses! If bad money management can kill giant chains like those, think of how hard it is for smaller businesses to get ahead?
But the question remains, should you do it yourself, or not? Let’s look at the pros and cons.
1. Potentially Save Money
The biggest reason why a small business owner would choose to do it themselves is to save money. You think that hiring an accountant would be expensive and you passed basic math in high school, right? I mean, you got a C, but that’s alright, because you’ve got a calculator. They said you wouldn’t always have one, but it’s right there on your phone. If you want a dedicated calculator, they aren’t very expensive. On top of that, basic spreadsheet programs like Microsoft Excel can run calculations automatically: all you have to do is set up the calculation and punch the information. Simple right? If you know how to use the tools, yes, it can all work out for you.
2. You Know Your Own Budget
If you do your own bookkeeping, you know exactly what your finances are. Hiring someone else to do it means you only get their reports. It puts some distance between you and your spending habits. If you do it yourself, however, you know exactly how much you’re spending and what you’re spending it on. You do it yourself, you see it all yourself. You know exactly what’s going on.
3. Avoid Schedule Conflicts
When you do it yourself, your bookkeeping gets done on your own time. You don’t have to schedule with accountants and never worry about if they’ll be booked up and unable to help you when you need it. You can do it after hours, before hours, or a little bit whenever you get some spare time. Things happen when you choose to do them.
1. Time Consumption
For small businesses, bookkeeping can take several hours every month. You should definitely be doing it every month, too, because otherwise it builds up into a huge mess that takes days to sort out when tax season rolls around. If you do it yourself, those are hours you have to personally spend. It becomes a question of what’s worth more to you: your money, or your time. You can’t have one without spending the other.
If you don’t know what you’re doing, you run the risk of getting audited by the IRS. One of our clients was a do-it-yourselfer before they signed up with us. They changed their mind when simple mistakes caused them to get audited by the IRS three times in a row! IRS audits are a hassle you don’t want to deal with. Not only do they eat up time, but they hit you with fines, so it’s a lose-lose situation for you.
Hiring a properly trained accountant gives you a skilled professional to run the numbers for you. You still get the records after and can check the numbers yourself if you feel you need to, but the accountant does all the hard work for you. An extra set of trained eyes can help you avoid errors.
3. Better Ways To Spend Time
Time consumption is already a con of this approach, but you think to yourself, “Hey, I don’t have to spend the money.” But consider this: what would happen if you spent those few hours every month doing more sales work instead of doing the bookkeeping? The sales are what make you money. A few hours making extra sales will easily cover the cost of hiring an accountant and probably bring in more. If you can give good customer service, you’ll get good customer reviews. Good reviews are one of the most important factors for getting new customers, so if you focus on sales and customer service, it’ll help you grow and make more money.
What’s Best For Me?
So, what is the best approach? Well, the truth is that the best approach depends on your business. We can tell you the pros and cons, but these are just things to consider when deciding how to do your bookkeeping. There’s no answer that fits every business model.
That’s why at Dragon Financial, we don’t make it just one or the other. Bookkeeping in Portland Oregon and online through virtual assistance is one of the services we offer. If it’s a good fit for you, we’re more than happy to do it. What if it’s not? Well, we can still help you out there, too. The biggest risk of doing it yourself is making a mistake and getting audited. The fines and fees from the IRS can set your business back, and possibly sink it entirely. You don’t want that.
If you still want to do it yourself, but are worried about audits, Dragon Financial can teach you the ins and outs of bookkeeping. We’ll show you what programs are best for managing your budget and help you learn to use them. That way, you can see what goes into it and gage for yourself how good you are. If you decide that doing it yourself isn’t right for your business, or don’t feel like you have a grasp on the needed skills, you can still hire us as your accountant. This is the best way to find out what the right fit for your business is and we’re more than happy to help.
Let Us Help
We all need to do the bookkeeping. Poor money managed will absolutely ruin your business. Whether or not it’s a good idea to do it yourself is a decision you have to make, but it’s one we can help you with. Go ahead and get in touch with us and see what we can do for you. We’re happy to answer questions, offer advice, or teach you the fundamentals. We’ll help you see what works best for your business, whether that means hiring us or not!