5 Reasons Why You Shouldn’t DIY Your Bookkeeping
When you run a small to medium-sized business, DIY is often your go-to way to get things done. For a number of important reasons, bookkeeping shouldn’t be on that list. When you DIY your bookkeeping, you can keep an eye on your financial bottom line. That’s a good idea, but only when you have the expertise to do it right.
Bookkeeping tracks the critical day-to-day numbers that answer your bottom-line questions.
- Am I making a profit?
- Do I owe too much money?
- Can I get a loan to expand my business?
- Is all of my effort worth it?
Accurate bookkeeping records sales, receivables, and payables. It calculates your profits, your losses, your cash flow, and your company’s financial well-being. You should pat yourself on the back for your do-it-yourself effort, but consider these five reasons why you shouldn’t DIY your bookkeeping.
1. It’s not as easy as it seems
If you’ve used bookkeeping software, you’ve likely encountered a steep learning curve. Bookkeeping software is useful, but only after you figure out how to use it. You must personalize it to match your business needs, then capture, organize, maintain, update, and sync your financial data to your accounts.
You must also perform daily tasks to keep your data accurate and up-to-date. While this is doable, it’s not so easy when it’s on a long list of DIY tasks scheduled at the end of your day.
2. A Bookkeeping professional is unbiased and credible
Bookkeeping should generate an accurate, chronological, unbiased, financial history. Your financial records convey these impressions when a bookkeeping professional does the work.
Compared to DIY your bookkeeping, a bookkeeper generates the financial details contained in your Income Statements, Balance Sheets, Cashflow Statements, and Accounts Receivable and Payable reports. As these data-rich documents provide a financial overview of your business, professionalism and credibility are important:
- To help you qualify for loans
- Document profits and losses for your taxes
- To record employee pay, withholding, and FICA
- Prove regulatory compliance (ERISA, etc.)
3. Bookkeeping is more complicated than you think
Bookkeeping isn’t just about adding and subtracting numbers. Before you can begin tracking your cash flow, you must set up your bookkeeping system with 10 types of bookkeeping accounts. These usually include Cash, Loans Payable, Payroll Expenses, and six others. A bookkeeper documents your financial data and ensures that it’s properly categorized.
The SCORE article, “10 Bookkeeping Basics You Can’t Ignore,” provides a brief overview of bookkeeping accounts and how they relate to your business. The article also discusses the need for timeliness and accuracy, and it suggests that you work with a bookkeeper.
4. You really don’t have enough time
If you’re like most business owners, you plan your day but it takes on a life of its own. Your efforts include tasks that get your business started in the morning and keeps it running until your employees walk out the door. When you add on bookkeeping and additional back-office tasks, sometimes your workday never ends.
5. A professional can do it better
At Goode Bookkeeping and Consulting, we are bookkeeping professionals and we enjoy what we do. Our founder is a CPA with nearly three decades of experience. We believe that DIY bookkeeping is a noteworthy accomplishment, but we offer a three-point alternative.
- We provide remote bookkeeping services.
- We do professional work for an economical price.
- We do it better than you.
Contact Goode Bookkeeping & Consulting
If you’d like to know more about our bookkeeping services, call us at 860-659-6543 or complete our consultation form.