Most business owners don’t really enjoy bookkeeping or accounting. They end up doing it late at night or on weekends, when they’d rather be spending time with their family and friends. Yet they carry on because they have a do-it-yourself (DIY) attitude and they think hiring an accountant is a luxury. After all, why not work a little later and do the books yourself?
That attitude needs to change. Getting an accountant or bookkeeper is not a lifestyle decision, it’s a business decision. Investing in professionals – or changing the way you use them – can bring considerable returns.
They’ll keep control of your tax obligations, identify savings, and help you grow your business. And yes, as a bonus, they’ll give you back your weekends. You just need to use them in the right way to make sure your money is well spent.
As a small business owner, you have to do a lot yourself. There simply isn’t the money to outsource much. In deciding whether or not to get outside help on something, you have to ask if doing it yourself creates extra risks or costs.
Here are the potential downsides of DIY bookkeeping and accounting.
I specialize in helping owner-managed businesses so I see a lot of clients who started off doing their own books. They come and see me when the job becomes too big or when they start making mistakes and losing money.
There are so many things an accountant or bookkeeper can do for you but here are some key areas where they’ll help your business immediately.
When business owners do their own bookkeeping, it often only happens when they can find the time. That’s not really giving your financials the attention they deserve, and it results in:
If you get an accountant or bookkeeper, they’ll clean everything up so you have accurate records backed up by documentation. They’ll even set you up with software that makes it much faster and easier to record future income and expenses. That way you’ll never fall behind again – and you won’t have to pay for someone to come and enter data for you.
Late filing or payment of taxes results in penalties and interest. We’ve taken on clients in the past who’ve lost thousands this way. When you get an accountant, you won’t miss any more deadlines. The good ones will work well in advance so that tax filing is smooth and stress-free. You’ll forget what it was like to dread tax season.
Plus an accountant can often reduce the amount of tax you have to pay. If you engage them at the start of the year and ask for tax planning services, they’ll come up with a strategy that keeps more money in your business.
Your invoicing system is central to the health of your business. If you don’t bill efficiently, you won’t get paid quickly – and that’ll leave you short of money. It sounds basic, but this factor alone undermines a lot of businesses.
As an example, I think of the plumbing and heating engineers that service our building. About two weeks after they’ve been, they send me an invoice, which gives me 30 days to pay. If I pay on time, their business is waiting more than six weeks for the cash, even though the employees who did the work were paid the week the job was done.
Get an accountant or bookkeeper to set up an automated invoicing system and you’ll be able to:
Accountants and bookkeepers can also give you good advice on invoice payment terms, to help reduce the time you spend waiting on money to come in.