Bookkeeping is the process of recording and tracking your financial transactions, and it is a vital part of the accounting process.
Bookkeeping itself is a highly important task, since it allows businesses to organise and evaluate their financial information. It also gives them the insight to make decisions about the business whilst ensuring they meet Government regulations regarding accurate record keeping.
DIY bookkeeping is when business owners attempt to take care of their books without the help of a professional, such as an accountant or bookkeeper. There are quite a few negatives and risks when it comes to DIY bookkeeping, and in this article we will explore them, and discuss why you might want a professional on board.
Hidden Cost 1 – Time and Effort
DIY bookkeeping often takes up valuable time, even more so if you aren’t too sure what you’re doing or how to do it efficiently.
As all business owners are aware, time is precious and business owners are already responsible for doing so much, whilst also handling the day-to-day running of the business.
If DIY bookkeeping becomes a highly time-consuming task (which often happens), it can become increasingly difficult to balance and give attention to the other tasks that go into owning a business, such as marketing your business, staff management and offering the products/services your business offers. This could unfortunately have consequences that negatively impact the success of the business.
Hidden Cost 2 – Errors, Compliance & Lack of Expertise
DIY bookkeeping presents quite a high risk of errors in financial data, and compliance with Government regulations. This is because business owners often aren’t as confident, informed or experienced in this area as professional accountants or bookkeepers.
Some of the risks of bookkeeping errors include…
Cash flow issues
Missing deadlines, possibly leading to fines
Increased risk of fraud
The inability to make strategic decisions, for example decisions relating to pricing
Hidden Cost 3 – Missed Opportunities
Due to the risks we have discussed above, it’s no surprise that inaccurate DIY bookkeeping can lead to missed opportunities and poor decision making for your business. If you do not know your numbers, you do not know your business.
Poor bookkeeping can lead to missed opportunities such as…
Being unaware of the ability to expand
Undercharging your customers
Not getting the insight into which of your services/products are doing the best in terms of income, resulting in a missed opportunity of making more money.
How a Professional Can Help
There are so many benefits to using a professional accountant or bookkeeper. Here are just a few of them…
Saved time and money
Peace of mind about your business finances & Government deadlines
Access to a wealth of expertise about all things bookkeeping
More time to focus on the general running of your business & your wellbeing
Up to date financial records
To conclude, due to everything we have discussed above, hiring a professional accountant or bookkeeper has so many advantages, especially compared to the risks of time-consuming, unorganised DIY bookkeeping.
If you’d like to know more about how a professional accountant or bookkeeper can assist you and your business, book a free consultation with us today. We help small to medium sized businesses every day with their finances and books. We make your business, our business.