Are you really saving money by doing your own book keeping
Book keeping is the practice of recording and tracking the financial transactions of a business it can be a timely activity if it is not your main role and although DIY book keeping is an option, it can sometimes cost you more than you realise.
Whether you are saving money by doing your own book keeping depends on various factors, including your skills, the size and complexity of your financial transactions, and the time you spend on bookkeeping tasks. Here are some considerations to help you determine if doing your own bookkeeping is a cost-effective choice:
Pros of DIY Book keeping:
1. Cost Savings: One of the most apparent advantages of doing your own book keeping is that you can avoid the expense of hiring a professional bookkeeper or accountant.
2. Control: You have complete control over your financial records and can access them whenever you need. This can be especially important for small business owners who want to stay closely involved in their financial management. Arguably with accounting platforms such as Sage and Xero you will always have access to your financial records at any time.
3. Learning Opportunity: Managing your own bookkeeping can provide you with a better understanding of your business finances, which can be valuable for decision-making.
Cons of DIY Book keeping:
1. Time-Consuming: Book keeping can be time-consuming, especially if you’re not experienced in accounting. This time might be better spent on other aspects of your business, such as sales and growth.
2. Risk of Errors: Without proper training and experience, there is a higher risk of making errors in your financial records. These errors can lead to financial discrepancies and problems down the road, potentially costing you more in the long run.
3. Complexity: As your business grows or if it has complex financial transactions, book keeping can become increasingly complicated. DIY bookkeepers might struggle to keep up with the demands of a growing business.
4. Opportunity Cost: By spending your time on book keeping, you may miss out on opportunities to generate more income or focus on strategic aspects of your business.
5. Compliance Issues: If you’re not well-versed in tax laws and regulations, you could miss out on potential deductions or credits, or you might make mistakes that could lead to tax penalties.
6. Audit Risk: Inaccurate or incomplete book keeping can increase the risk of an audit by tax authorities, which can be a costly and stressful experience.
To determine if doing your own book keeping is saving you money, you should consider the trade-offs between cost savings and the potential drawbacks.
Many business owners contact us to understand the financial impact of moving their book keeping to us versus the extra time you save to focus on business growth. Moving to accounting software such as Sage or Xero means that you and our experts have access to real time information all the time.
Ultimately, the decision should align with your business goals and your confidence in your bookkeeping skills. If you are finding that you are spending an increasing amount of time on your admin or you are being reminded by your accountant to reconcile your accounts, now may be the time to call us and make the move. Find out more about our book keeping support HERE
If you need support with your book keeping, get in contact with us on:
t: +44 (0)7836 355007
Or pre book an appointment with Calendly
