Accounting is a crucial part of business, but it’s not something every business owner loves doing. It can be tedious and confusing, especially if you’re just getting started. Many business owners make the mistake of assuming that accounting is easy or that they’ll save money by doing their own accounting instead of hiring an expert; however, the reality is that there are many hidden costs associated with DIY accounting.
You should not do your own accounting because of the compliance risk. Compliance risk is the risk that you will not meet the requirements of your industry, or the law.
Compliance risk could be anything from a government audit, to an insurance underwriter investigating whether you have enough money in reserve to cover a claim.
If you do not meet these requirements and can be fined, or even worse have your business shut down!
Missing claimable expenses
You may not be aware of all the expenses you can claim. You might miss out on claiming expenses you are entitled to and did not know were claimable, or you may have known of them but didn’t think they would work for your industry. If a professional accountant has experience with different industries, he or she can help you identify expenses that could be claimed in your particular industry.
In the time it takes you to do your own accounting, you could be doing much more for your business. When you take over the tasks of reporting, compliance and planning from someone else:
- You have more time to focus on what’s important.
- You can make strategic decisions that will help grow your business in a long run.
- You’ll save money by hiring a specialist instead of an amateur who is not competent at their job.
Opportunity costs are the costs of not taking action. If you do your own accounting, you are incurring an opportunity cost of not being able to focus on growing your business. If you’re busy dealing with taxes and bookkeeping instead of developing new products or improving customer service, then the value that could be created by these activities is lost forever. You might even miss out on other opportunities entirely!
You should use the services of a professional accounting firm
So why should you use the services of a professional accounting firm? Here are just some of the advantages:
- Expertise. A chartered accountant has years of experience in handling business and personal tax matters. They know how to prepare your taxes so that you can take full advantage of all available deductions, credits, and incentives.
- Compliance. Every small business needs to be compliant with laws regarding financial disclosure requirements. Accountants help ensure that your business is up-to-date on all its obligations – which includes filing required reports on time, making sure payroll taxes are properly paid on time, keeping accurate records for management decisions, etcetera…
Accounting is a necessary evil, and you should do it right. Don’t try to save money by doing your accounting yourself. It’s just not worth it, but we can help.
At Accounting 247, we specialise in helping clients take care of their books so they can get back to running their businesses. By doing this, we’ve helped our clients save time and money that would have otherwise been wasted trying to keep track of their books themselves. So stop worrying about your finances—get in touch today!