Why You Shouldn’t DIY Bookkeeping
When you run a small to medium-sized business, you probably try to handle the books to avoid the cost of outsourcing to a bookkeeper. It might be a clever way to save up on money, but trying to pinch pennies in areas where shouldn’t, particularly bookkeeping, can more often end up costing you more in the long run.
On a serious note, the consequences of bad bookkeeping can be devastating. Even a simple bookkeeping mistake can cost you time and money to try to recognize and amend it. The experts at Brochu & Associates Ltd. do not want to leave you vulnerable to audits and penalties. Therefore we have highlighted why you shouldn’t DIY bookkeeping. Keep reading to learn where you could go wrong and how a professional avoid pitfalls.
1. It will cost you more in the long run
Doing your bookkeeping on your own can save you money in the short run, but if or when you make a mistake, you will carry that error through. It can open you up to many financial errors, tax errors, hefty penalties, and cash flow problems, and these errors can still be there years later.
2. You could face financial implications
The financial implications that could arise from DIY bookkeeping are that these errors (even small ones) will be costly in trying to balance your bookkeeping, which means you could also be paying higher taxes, or even penalties to the government.
3. You could fail to keep up with the system
One of the biggest things that go wrong in DIY bookkeeping is that it just doesn’t get done, and the process becomes overwhelming for you. To clear this problem up, you will need a lot of time and support. We have seen it where a company drops off bookkeeping for three or four years, and they have only done so because the government has asked them for it. The government has given a timeline to have it completed, and there are late fees and penalties added in as well, and of course, the biggest issue is that receipts and statements are faded or lost, and companies end up paying more money because they can not show proof of proper expenses.
Do the right thing - Hire a professional!
Hiring a bookkeeping professional can give you three invaluable advantages:
Having someone else do your bookkeeping for you allows you to focus on something you are good at in your business.
A professional bookkeeper should be able to go over your month-end to show you trends in your company and help you succeed.
If they make an error or something goes wrong, the bookkeeper must be able to fix the problem before something gets out of hand. They are usually able to see it before you do and correct it before the tax authorities impose penalties,
A professional bookkeeper will do wonders for you and your business. But the type of professional you need to look for is someone that can answer your questions, make you feel at ease, feel confident in your numbers at any time.
Generally, bookkeepers range in price from $20 an hour to $100 an hour. But as bookkeeping is a very important job, do not choose the cheapest or the most expensive services. You have to weigh the pros and cons of all the services a bookkeeper can provide you.
There are plenty of reasons to hire a bookkeeper, but you don’t need to outsource your bookkeeping if you don’t want to. If you enjoy bookkeeping, then you can do it yourself. In actuality, you do not need a license or certification to do this job. However, having your bookkeeping done by someone who understands the different account rules and has a certification and schooling in bookkeeping can save you a lot of money over time.
Also, If you or your small business can not afford a bookkeeper or an accountant, you need to carry out this job on your own. In this case, you must pay attention to small details, making sure you are organized and have good time management. Your biggest challenge will be overcoming procrastination!
As a leading tax accountant and bookkeeper in London, Ontario, at Brochu & Associates Ltd., we provide personal income tax preparation, as well as corporate tax preparation, bookkeeping, payroll, and accounting services. Our team is here to assist with the financial details of your business so that you can focus on other tasks to help your business grow.