To DIY or not to DIY… that is the question!
To run a successful business, you have to get the essentials right first. Your business accounts are one of the most vital ingredients in the recipe for success. Mess them up, and you will quickly find yourself and your business in hot water.
Many new business owners choose to DIY their business accounts, believing that it will save them money. While this may be the case for some people, it can also backfire. Mistakes or delays with your financials can be costly and time-consuming.
Some businesses will benefit from outsourcing their accounts, while others may find that keeping them in-house provides more benefits. To help you decide the best option, let’s take a look at the pros and cons of doing it yourself.
The Pros Of DIY Accounting
Saving Money?
If you are a smaller business with manageable accounts and a tight budget, it may make sense for you to take care of your own bookkeeping and accounting from day to day. Professional accountants and experienced bookkeepers don’t come cheap, and perhaps it’s not an expense you can justify just now if the work is minimal.
But keep in mind there is a disclaimer here. If you are inexperienced with handling business accounts (not to mention rushed with a million other time-sensitive jobs), you may end up costing your business money unnecessarily. Even a simple inaccuracy or miscalculation takes time to fix, and can potentially lead to penalties and fines – or even legal action.
Understanding Your Business
By handling your own accounts, you gain a deeper insight into your business and how everything is progressing. If you are committed to maintaining your records consistently and do everything efficiently, you will always know the status quo of your finances in real-time.
Understanding your cash flow helps you make important financial decisions quickly and wisely. You will be able to look at the budget personally and see where you can save or where you can afford to spend a little extra.
Even if you do end up outsourcing down the line, you will have learned the basic ins and outs of the finances, and have a better handle on how it all works.
The Cons Of DIY Accounting
Time Consuming
Running a business is a massive task with a neverending to-do list. With so much calling for your attention, it’s easy to keep pushing those daily jobs down the list. Before you know it, it’s the end of the month and you haven’t been able to find the time to sort your payroll, invoices, bills, or update any of your financial records. Oops! Instead of being a quick daily task, this becomes a complicated, day-long job that is going to take you away from other important things.
Handling your own finances requires consistency and attention to detail. It is going to move your focus away from the essential tasks of growing your business further. Add to that the research you will need to do to get your head around employee entitlements, holiday pay, and tax deductions, and you’ve got a lot to handle.
By letting an expert handle your business accounts, you don’t have to spend hours every month trying to figure out the numbers.
Potentially Costly
While you may think you are saving money by not paying someone else to do the accounts, don’t forget that your time is money too! Figure out what your hourly rate is worth, and then calculate how long you spend on the accounts every month. Is it really cheaper than paying someone else?
On top of that, errors can be expensive. The experts have studied for years to deeply understand the intricacies of finances, taxes, software, and all the stuff you may not even have considered. They will get the work done faster than you and without errors.
You Will Need To Learn The Software
Although accounting software is designed to make life easier for all account keeping, you still need to take the time to learn how it all works. While the average business owner barely has time to learn the basics, a professional bookkeeper or accountant will know how to get the most from the software. Many of them will have taken several courses in a constant effort to stay up to date with the latest developments. That means they are able to navigate the programs effortlessly.
Takes You Away From Your Core Business
There is a reason that you started your business. That reason probably wasn’t to spend days stressing over your business accounts! Every minute that you spend doing bookkeeping tasks is a minute that you could be using for revenue-generating tasks instead. You could be working on your business to grow it, rather than spending time working in the trenches to keep it running.
You started a business to do what you love. And what you love probably isn’t bookkeeping! (Shock! Say it isn’t so!).
Missing The Bigger Picture
Professional bookkeepers and accountants are skilled at interpreting your financial data. You may be able to keep your records in order and meet all the legal requirements, but do you know how to create financial reports and utilise them effectively to improve your business?
Without a more experienced set of eyes to analyse your data, you might be missing out on some vital financial advice that could make a significant difference to your business.
As a business owner, you need to be focused on the bigger picture as much as possible. Take a step back and do the calculations. If you think that the DIY approach to your own business accounts is the most sensible option for you, make sure you can commit to doing the job effectively and consistently. If not, find someone you trust to take care of this essential task for you.
The team here at Admin Army might just be those trustworthy people that can help you to keep your business accounts accurate and up to date. We are expert bookkeepers who specialise in small to medium business accounts. Drop us a line today to learn how we can save you both time and money.