With so many decisions, you must feel stuck between bookkeeping services vs. DIY Bookkeeping.
As a small business owner, you most likely have a ‘Do It Yourself’ – mindset. You’ve started your business from scratch and built everything from the bottom- up.
That’s perfectly fine since it is a valuable skill. However, there are stages in the business growth process where you may consider other options.
Accepting familiar patterns or embracing new possibilities is a common dilemma, as every decision has benefits and drawbacks.
We’ve created this blog article to help you through this stage.
Benefits of DIY bookkeeping
DIY Bookkeeping is your starting point if you are at the very beginning of your business. In this context, we can focus on a couple of benefits.
The first benefit is that you will save money. To use bookkeeping software managed by you looks more attractive if you judge by the price.
Business owners now have access to a wide range of affordable accounting tools. Handling your accounting needs makes it effortless.
Your business records, bills, and data will remain private with the DIY method. If this aspect of the business is essential for you, consider implementing it.
Last but not least, you can gain or improve your organizational skills by doing it yourself.
In general, there are two types of people. The first enjoys the process of organizing. The second wants the result (organized space, data, etc.).
No matter the type, you will become even more aware of details and organization as an essential part of this method.
Benefits of bookkeeping services
There are many reasons why outsourcing your bookkeeping department to professionals is crucial. As your business grows, the bookkeeping tasks will become more complex.
Also, there are phases when time is the most valuable resource. You can focus on developing your business with the proper amount of time.
Let’s put it like this: you will save time, which is one of the crucial benefits of outsourcing bookkeeping services.
We understand that you have to consider many things as a small business owner. But if you are aware that Bookkeeping is a full-time job, it’s enough to start exploring other options for your business.
If you are calculating by the price, maybe you should see things from this perspective:
Let’s say that outsourced bookkeeping services will have a higher price. But, when you do your Bookkeeping on your own, do you calculate your hourly price?
Have you considered which part of the business will face roadblocks and difficulties in having clean books done by you?
Also, consider that besides the time, you will save your peace of mind if you eliminate the bookkeeping errors.
(You can read more in our previous article in detail about Bookkeeping Mistakes to Avoid: Protect Your Small Business Finances)
Pros & Cons
- Expertise: Professionals with established experience in the field provide quality bookkeeping services. They have extensive knowledge of bookkeeping and accounting principles. Skills and expertise like this can provide valuable insights to help your business. You will make more informed financial decisions.
- Time-saving: Hiring a team of professionals can free up your time to focus on other essential aspects of your business. They will set you free from daily bookkeeping tasks.
- Accuracy: High-skilled team can ensure that your financial records are accurate, organized, and up-to-date, reducing the risk of errors and costly mistakes.
- Compliance: You’ll have peace of mind knowing that your business is complying with all necessary financial regulations and tax laws.
- Scalability: As your business grows, a professional team of experts can provide support and resources to help you scale your financial operations.
- Cost: High prices can be an issue, especially for small businesses or startups with limited budgets.
- Dependency: Having a professional on your side may mean you depend on an outside party to handle sensitive financial information. Some business owners are uncomfortable with this fact.
- Lack of control: When you outsource bookkeeping services, you may need to gain more control over the financial data and reporting.
- Communication: It is an important part. You have to ensure that communication with your bookkeeping service is straightforward. Consistency in communication can contribute to avoiding misunderstandings or errors.
- Cost-effective: DIY Bookkeeping is typically less expensive than hiring a bookkeeping service.
- Convenience: Organizing and handling books can be done at your own pace and schedule.
- Learning: This journey can be a valuable learning experience. Business owners should strive to understand their finances better.
- Time-consuming: The DIY method can be time-consuming, especially for business owners unfamiliar with bookkeeping principles or software.
- Mistakes: You’ll probably make mistakes in your financial records. The bigger the mistakes, the more difficult it will be to fix them later. Compliance: Ensuring compliance with financial regulations and tax laws can be challenging. Business owners without a background in accounting or Bookkeeping will experience difficulties.
- Scalability: DIY Bookkeeping may become more complex and challenging to manage as your business grows.
How to DIY
If you are at the start of your journey and DIY Bookkeeping is your affordable solution, let us help you. By implementing the steps of this basic, you will be on the right track:
- Choose the right bookkeeping software
- Set up a chart of accounts
- Keep track of receipts and invoices
- Categorise transactions
- Reconcile accounts regularly
- Store important documents securely
- Back up your data regularly
- Stay organized
Our road map
The best advice we can give you is to take one step at a time. Inform yourself about every aspect of your problem.
Set a plan if you have budget limitations and decide to apply the do-it-yourself method. With this plan, determine a time frame for how long you will be doing this part of the business.
When circumstances change, look for the best solution for your business—bookkeeping matters.
If you outsource your Bookkeeping to professionals, ensure you have chosen the right team. Ultimately, they will have access to sensitive information – your finances.
You will make future decisions about your business based on their knowledge. Again, bookkeeping matters.
Choosing the right is crucial. Your decision can significantly impact your business’s financial health.
Both options have their pros and cons. Ultimately, it comes down to your business’s unique needs and budget.
If you need more time and expertise or have a complex business structure, outsourcing bookkeeping services might be your best choice. On the other hand, if you just started your business and have budget limitations, DIY Bookkeeping might save you money and offer more control.
Whichever option you choose, make sure to do your research. Consider your business’s needs and goals, and stay organized to keep your finances in order.
Remember, accurate Bookkeeping is essential for making informed business decisions and achieving long-term success.
Can I do my own bookkeeping for my business?
If you have a small business at the starting point and operate with simple financial transactions, the answer is yes.
However, Bookkeeping requires knowledge of accounting principles and practices and familiarity with bookkeeping software and tools. There are two options.
- First option: is to start upgrading your knowledge and improving organizational skills.
- Second option: if you need more confidence in your ability to maintain accurate financial records, hiring a professional bookkeeping service may be best.
Why hire a bookkeeping service?
There are several reasons small business owners should hire a bookkeeping service.
Professional bookkeeping services can ensure that your financial records are accurate and up-to-date, which can help you make informed decisions about your business.
- Outsourcing your bookkeeping can save you time and effort, allowing you to focus on running and growing your business.
- Bookkeeping services can provide financial reports and analysis to help you identify areas of your business that need improvement or optimization.
Who needs bookkeeping services?
Any business that wants to maintain accurate financial records and make informed decisions about its business can benefit from bookkeeping services.
Businesses that have complex financial transactions handled by a team of professionals can experience benefits for their business. Starting from financial health to reduced stress during tax season.
It’s crucial to build trust with your outsourced bookkeeping team in order to have peace of mind while focusing on core business activities.