Hiring a Bookkeeper vs. Doing it Yourself
Managing the accounts and doing the bookkeeping are good practices, especially if you have a good knowledge of the accounts. The decision of handling accounts on your own is good and favorable for the new business owners when the complications are not that high. However, varying out the responsibilities further can be a risk as to the engagements of the business owners’ increase quite significantly.
Pros of Handling Bookkeeping Yourself:
- The first and foremost advantage of doing your bookkeeping is that you save on the expenses for your company. If you are a small business, it makes sense to save here since bookkeeping not too complex to handle at this stage.
- While you do things yourself, you are aware of the latest condition of your company and its financial status. It keeps you ready to handle any situation that becomes mandatory for you to manage things well.
- Keeping the information in the viewpoint, you can plan well for a better outcome for your business. You can even cut down some unnecessary expenses to get a better hold on the finances. Your decisions and strategies can help you to get a better return on your business.
- While doing the bookkeeping yourself, you can create a secondary plan to meet a crisis. This can be an effective measure to overcome a situation that is likely to harm you in the long run.
Cons of Doing the Bookkeeping:
Time-Consuming Process
Doing your own accounting or bookkeeping can be a time-consuming process. It demands a lot of your valuable time. Furthermore. if you fail to provide enough time to accounting, your balance sheets will look out of order, and several mistakes and confusing entries may occur.
Distraction From Work
When you are a business owner, your primary focus should be running and growing your business efficiently. However, if you take up accounting in your own hands, your attention will be divided, and you will also have to focus on managing your books of account. This way, accounting on your own is a big distraction.
Lack of Knowledge
There are chances that you may not be aware of all the codes, laws, terms, processes, and method of accounts. If you do not have accounting knowledge, you can make a serious mess of your business accounts.
Should you hire a pro?
Hiring a pro is a good idea you need the knowledge, accounting tools, and experience a professional accountant brings to the table.
Navigating through all the complex tax rules and regulations requires knowledge and skill most people just do not possess. A good accountant will ask you the correct questions and dig into all your finances to get and a good overall picture of how your finances.
Additionally, an accountant should be able to give you good advice on the state of your finances and might even help you better it. For some people using an accountant to save time and avoid a headache. But one thing to keep in mind is that not every accountant is a good one, and accidents have a chance of happening if you don’t pick someone with a good track record.
Be sure to keep asking your accountant questions on what he is doing to avoid any errors that he might make with your info. Remember, you are ultimately responsible for what is reported on your tax returns.
Pros of Hiring a Bookkeeper
Professional Help
When you outsource parts of your business, you’re accessing a pool of knowledge and expertise that you don’t have. Hire a bookkeeper and you’ll receive expert help from someone that knows what they’re doing.
They’ll have worked with other businesses like yours, providing support and advice to ensure they take the best course of action. Plus, they can translate any complicated jargon into simple English so that you’re always in the know.
Keep in mind that there are no qualifications needed to carry out bookkeeping. This means that anyone can do it, so nothing is stopping you from completing your own bookkeeping tasks.
Focus on Other Areas of Your Business
When project deadlines are approaching and the phone doesn’t stop ringing, the last thing you want to worry about is balancing your company’s books. It’s an unwanted distraction that takes your focus away from things that will actually make you money.
Hire a bookkeeper and it’s one less thing to worry about. You can concentrate on tasks and projects that will drive business growth, safe in the knowledge that your bookkeeping is being taken care of by an expert.
But, it’s worth keeping in mind that bookkeepers will have many different clients, so they may not always be working on your business or they might prioritise someone else over you.
A Fresh Outlook on Your Business
Sometimes, it’s difficult to make hard choices or see when something’s not right when it’s your own business. When we’re the owner, we look through rose-tinted glasses at company finances and we’re willing to overlook potential red flags.
Work with a bookkeeper and they offer a new perspective on your business. They’re less likely to be sentimental and base decisions on cold, hard figures. However, this can be a little jarring and can lead to some awkward conversations between you and your new bookkeeper.
Cons of hiring a bookkeeper
- Hiring an outside bookkeeper means a higher risk of exposing your data. Your bookkeeper has access to sensitive bank data such as account numbers and online banking passcodes. If not properly monitored, this might cause data breach which can affect your business.
- A bookkeeper would mean you would lose sole control over your books. Since you hire a bookkeeper, you entrust the control of your books to them. This may also result in a loss of information when not monitored.
- Their mistakes become your company’s mistakes. Any errors your bookkeeper makes will still be accountable to your business. This goes the same with any missed payments and noncompliance that might occur in the future.
- There are hidden costs to hiring a bookkeeper. Aside from their hourly rate, your bookkeeper might charge additional costs for their services. However, you won’t be sure about the quality of service they will give you.