Everyone who runs a small business is always looking for ways to cut corners and save money. When you’re starting up, it’s natural to try to do as much as you can on your own or at least keep it in house, instead of paying someone else to do the work. Bookkeeping is one of those areas where it just seems wasteful to hire someone. Doing your own books is reasonable in the early days, but at some point in your company’s growth, it’s likely that it will cease to save you money, and you may actually be losing. Here are some of the hidden costs of doing your own books that you might not be aware of.
As my grandmother used to say, “everyone makes mistakes”. However, accounting professionals are trained to review and correct their work, and have the expertise and the knowledge to catch those mistakes. Additionally, when you hire an accounting firm, there will typically be multiple levels of review and oversight, which really eliminates the possibility of the costly errors you might make when doing your own books.
I’m sure you were great in math at school, and bookkeeping isn’t exactly rocket science. But there’s much more to managing your company’s finances than getting the arithmetic right. If that’s all there was to it, there wouldn’t be an entire field of accounting, let alone schools, degrees and certifications. Accounting professionals bring to the table their education and experience with accounting best practices. Doing your own books without that expertise leaves you at risk of having inaccurate or incomplete records, and will potentially put you at risk.
We all know that we can’t avoid paying taxes. But if we don’t file the necessary documents accurately and on time, it’s only going to get worse. As a business with employees, you’ll need to stay on top of payroll tax, social security, sales tax, unemployment, and more. There’s no room for lack of precision in this area. Additionally, tax laws are always changing, and with everything you’ve got on your plate, you can’t possibly stay on top of the latest updates the way that accounting professionals do. If you hire an accounting group, you can rest assured that they’ll do the necessary filings correctly, completely, and on time. What’s more, they’ll find breaks that will save you money that you’d likely miss if you were doing your own books.
“Time is money”, as we’ve always heard it said, and your time is certainly no exception to the old adage. There are plenty enough demands on your time already, and your efforts can be put to better use than doing your own books. You’ve got to be constantly improving your offerings, bringing in more business, and increasing revenue, and time-consuming activities like bookkeeping will ultimately prevent you from making more money. Why not just leave the work in the hands of experts, and free up your own time for more valuable uses?