Are you starting your own business?
Or maybe you’re an entrepreneur or startup founder who’s been at it for a while.
Either way, you probably have lots of questions about the best way to keep your books.
That makes sense, since bookkeeping and accounting are so important to set your business up for success.
We know the world of accounting and bookkeeping can feel overwhelming.
Here at Business Minding Services we specialize in providing comprehensive financial solutions for small businesses and entrepreneurs.
So, we’re pretty familiar with the question of whether you should do your books yourself or hire someone to do it.
It’s a common question that many businesses face in and outside of accounting.
There isn’t a “one-size-fits-all” answer, every business is unique.
However, there are some common factors to consider.
To help you make the choice between doing it yourself or hiring a bookkeeper, we’ve put together an article on the topic.
We’ll go through and expand on some key reasons to do it yourself and key reasons to hire someone.
Read on to learn more!
Reasons To Do Your Own Bookkeeping
There are a couple of good reasons you might want to do your own bookkeeping.
Outsourcing your bookkeeping can feel like a simple and easy solution.
However, this isn’t always necessarily the case.
From flexibility to finances there are a few advantages to doing it yourself.
In this section, we’ll describe and expand on three key reasons for doing your own bookkeeping.
1. It Can Help You Better Understand Your Business
When you’re doing your own bookkeeping, you’re going to have a more in depth look at your business finances.
Instead of just occasionally looking at the bank account balance, you’ll have a real time finger on the pulse of your business.
This might help you notice details to make things more efficient.
Knowing what’s going on with your finances “on demand” can also help you react more quickly and implement changes to improve things.
2. It’s Good To Learn New Skills
Learning new skills can always be a bonus in running your own business.
Accounting skills are no exception.
In fact, improving your bookkeeping and accounting skills could improve your overall business.
This is because these skills can help you make more informed, and therefore better business decisions.
There are also many resources out there already to help business owners learn and improve on these skills.
3. In The Short Term, It May Be Cheaper
Accounting and bookkeeping services can cost a lot, so in the short term, it can be cheaper to do it yourself.
When you’re just starting a business, often the bookkeeping will be simple enough to keep track of on your own.
It might not even take that long, since newer businesses will likely have a limited number of transactions every month.
This is especially true for startups and side hustles.
Why DIY Bookkeeping May Be A Bad Idea
Now that we’ve looked at some reasons to do your own bookkeeping, we’ll look at the disadvantages to doing your own bookkeeping.
There are a number of reasons why doing your own bookkeeping may be a bad idea.
These are important to consider and understand to make sure you’re making the best decision for your business.
Below, we’ll explore and expand on five reasons why hiring a bookkeeper could be the best idea for your business.
1. Professional Bookkeepers Are Better At It
Obviously it’s important to cut costs where it makes sense when running a business.
However, if you spend too much time on doing things yourself, it can take away from the time you spend actually growing and running your business.
Professional bookkeepers are efficient and effective in performing this function for your business.
They can also help you by providing expert insights on your business finances.
2. Your Bookkeeping Software Might Be Complicated
Most bookkeeping software companies try to make their product easy to use.
This isn’t always true in practice.
Some people might find it easy to pick up on how to use their bookkeeping software.
Others might find it more difficult.
Maybe your bookkeeping software just isn’t for you, and it would be a better use of your time to focus on other parts of the business.
3. You Might Trigger A CRA Audit
Professional bookkeepers are trained in various accounting rules.
If you’re doing your own bookkeeping, you might miss something, or misunderstand a rule.
This could look suspicious to the CRA, triggering an audit.
Then you’ll have to spend even more time making sure your books are in order for an audit.
A professional bookkeeper can minimize mistakes, and you’ll be able to rest assured that your books will be in good standing for audits.
4. It’s Easy To Neglect When You Get Busy
As you continue running, and growing your business, you’re likely to find more and more things competing for your time.
One of the things that can easily slide off your to-do list when more pressing things are happening is bookkeeping.
Maybe you’re working on an intense strategic planning period, or maybe it’s a busy season and you just have a lot of orders to fulfill.
Forgetting about your bookkeeping can lead to bigger problems like forgetting to file for sales and income tax deadlines.
Regardless of the circumstances, a professional bookkeeper can bring more peace of mind.
You can run your business knowing a professional is taking care of the books.
5. If You Make A Mistake, It Can Cost You Dearly
Bookkeeping in practice can be really time consuming and complex.
If you’re tired, have other priorities, or aren’t familiar enough with accounting rules, this could lead to making mistakes in your bookkeeping.
If you do make a mistake, this could have a number of consequences.
It might mean losing a ton of money on a project, or overall just not have an accurate look at your business finances.
This can mean not having a clear picture of what is and isn’t working.
You could also end up in trouble with the CRA, contractors, or suppliers.
Book Your Consultation With Business Minding Services Today
Overall, the best way to make this decision for your business is consulting with a professional.
You don’t have to let bookkeeping and accounting overwhelm you or take away time from the other aspects of your business.
At Business Minding Services, our experienced accountants and bookkeepers are here to support you and set your business up for success.
We’ll provide trusted, expert advice on the best choices for your circumstances and unique business.
Book your consultation with Business Minding Services today.
