Editor’s note: The following is a verbatim excerpt from ASBA’s “Forge Ahead: Building an Accounting System for Your Business.”
Hiring Help Versus Doing It Yourself: The Small Business Dilemma
When it comes to your small business, it’s personal—and for good reason. You brought your small business to where it is today, from concept to execution. So, when it comes to things like bookkeeping and accounting, you may find it easier to do it yourself as well.
However, while there are benefits to doing your own bookkeeping, there are also pitfalls to watch out for too. Depending on the size and complexity of your small business, you may need to consider whether hiring an accountant may be better than doing your own books. Every small business owner has had this dilemma. Should you do your accounting yourself or contract out? Here are some pros and cons to consider.
DIYing Your Small Business Accounting Systems
The Pros
When starting your business, it’s a really good idea to handle your own accounting. This gives you a pulse in your business. Getting involved in accounting early helps you understand every aspect of your revenue and expenses. If you have a company with few or no employees, this may be a viable long-term option.
The Cons
On the flipside, DIYing your books can take up a lot of your time and may demand your attention away from other important matters with your business. Your bookkeeping also serves as an important document for assessment each year, so you and your business can’t afford mistakes. A single penalty, even if done unknowingly, could cost you.
Helpful Tips For Doing Your Accounting On Your Own
• Build a personal relationship with a tax advisor and tax accountant
• If you can’t afford a CPA at the time, consider hiring a bookkeeper
• If you’re spending more than 3-5 hours a week on bookkeeping, you’re spending too much time and need to hire somebody to help
Hiring an Accountant
The Pros
Finance might not be your strong suit. When you have many other tasks vying for your attention, this isn’t an area you want to make a mistake. Having an experienced accountant can help keep your finances in good order and save you money in the long run. They are aware of all the tax laws and codes that could benefit or hurt your business. Additionally, a good accountant can assess the likelihood of getting bank loans approved and can even make introductions to other key business connections thanks to their network.
The Cons
The obvious con of hiring an accountant comes down to cost. It is an extra expense, and you’ll need to trust someone else to have access to your confidential business information. However, many business owners will find that having a professional on their side may save them money in the long run and free up time to focus on their business.”
To read the full course series, visit ASBA’s Forge Ahead program and sign up for free access to high-impact, on-demand learning.
