It can be tempting to cut corners when laying the foundation of your business. Most new business owners try to pinch pennies where they can—even in areas they shouldn’t. For almost all businesses, making money is a priority, but how you manage that money is equally important. When you try to manage the accounting and bookkeeping for your business yourself, you may run into trouble. Here are some things to consider before you try DIY accounting for your business.
When you’ve got a million things on your plate, things can fall through the cracks or get deprioritized. Your business’ bookkeeping should never be put on the back burner. The time spent reconciling reports, figuring out finances, and learning how to keep your books correctly could be put to better use. You should be able to spend time on ways to grow your business, not accounting and bookkeeping.
Incorrect Data Entry:
When you’re busy, rushed, or distracted, it’s easy to enter incorrect data into your books. This incorrect data trickles down into your reporting and business records.
How can you make business decisions with incorrect data? When your books are wrong, your reports will be too. When your reports are wrong, you can’t make data-driven decisions for your business.
Because you’re a business owner and probably not an accountant, you may not know all the things you can deduct. Missing deductions costs your business money.
Incorrect books can cause you to miss revenue, and you may never know. By having up-to-date, clear financial records, you’ll be able to ensure that you know what is happening with every penny.
When your books are messy, you may not notice an unpaid invoice—by you or someone who owes you. Unpaid invoices can collect interest or be found at a time where the budget it tighter than usual.
Underestimate Tax Bill:
When it comes to paying taxes, no one likes to be surprised by a larger number than what they were expecting. Incorrect books can cause a miscalculation and underestimation of your tax bill.
Everything is Legal:
Accountants and bookkeepers are specially trained to be compliant with current laws and regulations. When you DIY your accounting, you may find yourself accidentally breaking the rules and in trouble.
By using a train bookkeeper or accountant, you save time, money, and headache for yourself and your business.