5 Dangers of DIY Accounting

5 Dangers of DIY Accounting

Right now, the whole DIY thing is a huge trend. People are making their own farmhouse tables, home décor, skincare products, and accounting… wait? that sounds out of place. That’s because it is, you shouldn’t try to do your own accounting if you have no experience with it. While you might be able to get away with making your own home décor and skincare products, accounting is something you might want to leave to the professionals. So many business owners make the mistake of trying DIY accounting to save money and usually end up losing more money this way. I’m going to touch on a few reasons as to why you might not want to try to tackle your business’s finances alone.

1. Keeping up on Bookkeeping

DIY bookkeeping

This may seem like a task you can kind of just push to the side, but if you do that you will quickly fall behind. Most of the time with small businesses, when something is pushed to the side it is forgotten about and keeps getting pushed further and further back because it’s not as “important” as the current task.

Not having up-to-date books will cause:

  • Loss of profits, if unpaid invoices are left unnoticed
  • Ruined relationships with suppliers because of unpaid invoices, which leads to bad credit rating
  • More work come tax season

2. Relying too Heavily on Technology

accounting technology

The problem with trusting accounting technology, is you think it will do all the work for you.  However, you still have to make that software work and know how to properly use it. Also, while one form of technology might work for one company doesn’t mean it will work for you and your company. I recommend doing some research first to figure out what will be the best fit for you and your needs.

3. Doing Tasks Last Minute

last minute accounting

Many business owners think of accounting more as a chore and not so much part of their job. Since it’s not a top of mind priority, important deadlines are often missed and forgotten about. When accountants wait until the last minute it causes:

  • Missed deadlines – which leads to paying more money
  • Mathematical mistakes – which takes time to fix and cost money
  • No planning for the future – which leads to (you guessed it) paying more money

4. Poor Organization and Recordkeeping

poor bookkeeping

Small business owners often lack the time and skills to manage record-keeping and bookkeeping. This is often not something on their to-do list and on top of that it takes time away from the business. Fortunately, there are dozens of apps out there to help make organizing a lot easier. With a little bit of help, you can have a system that works great for your company in no time!

5. Trying to do it all Yourself

in-house accounting

Doing all your accounting in-house is not something you should do unless you’re an accountant yourself. A lot of people do this because in their mind this is the most cost-effective, but in reality, time is money and they don’t have the time. For small business owners in particular, they need all the time they can get because usually, they are lacking manpower. Passing the accounting work on to an expert will allow you to focus on the important components of your business.

 

Moral of the story: Accounting IS an important task, don’t push it to the side and if you aren’t comfortable doing it yourself (sorry YouTube videos probably won’t work for this one) you should think about outsourcing. Being smart about it, in the beginning, will save you money in the long run!

Learn more about Outsourced Accounting! 

 

By Vinnie Fisher

Vinnie fisher is an entrepreneur, author, husband, and father of 4. A lawyer by trade, for almost ten years, Vinnie focused on tax planning, corporate formation and operation of closely held businesses. Vinnie was a principal partner in his law firm that he wound down to pursue a career as an entrepreneur. After the creation of a series of successful internet and e-commerce companies, he discovered a much needed service for business owners. In 2014, Vinnie opened Fully Accountable, an outsourced accounting and finance firm for e-commerce and digital businesses. Today he serves as the CEO of the company. Fully Accountable a cutting edge firm that offers done for you services that includes everything from master bookkeeping to fractional CFO services. We are digital experts specializing in high transaction businesses. Our clients are all over North America. We offer a complete accounting back office for your business costing less than the price of an entry level person in your company. Our data analysts and accountants do the work and provide the proactive, forward thinking feedback you need to make the right decisions to increase your growth and double your profit margin.