DIY is often the go-to way to get things done in most small businesses. It’s less costly and gives you more control over some crucial tasks. But if there’s one business task you shouldn’t DIY, it’s bookkeeping. Sure, it allows you to keep an eye on your financial bottom line, but that’s only effective when you have the skill set and experience to do it right.
It’s best to leave your bookkeeping and taxes to the hands of the pros. To illustrate that, here are some reasons and situations that call for you to stop doing the bookkeeping yourself.
Taxation for sole proprietors is a bit complicated.
If you run your business as a sole proprietor (or an LLC that hasn’t elected to be taxed as a corporation), you have much more to be concerned with than the average taxpayer. You have to understand which expenses can be deducted and how to categorize and file them properly. For instance, purchasing business equipment is an expense that would depreciate over time. So how will you categorize that expense to write it off successfully?
Also, sole proprietors must report all business profits on their personal tax returns. The business isn’t taxed separately. And if you have other small businesses or freelance gigs, tracking every source of income and possible deductions may seem overwhelming. It’s best to leave all your bookkeeping and tax filing in the hands of a professional accountant.
Tax laws are constantly changing.
Say you’ve learned all the basics of bookkeeping in the past year. That’s good, but how will you adjust if the tax laws change the next year? In 2022 alone, there have been a bunch of tax changes that impact business owners, self-employed, and freelancers. You may have to unlearn some information and adjust the way you do your bookkeeping for your business. Simply put, you have to spend more learning time on this administrative task. On the other hand, accounting professionals are always up-to-date with tax law changes. Plus, they can adjust quickly to changes since they have the skill set needed to be agile in their industry.
Consistent bookkeeping is a challenge.
The most difficult part of bookkeeping is doing it well consistently. It’s easy to miss out on important aspects, especially if you’re not an accounting professional with a trained eye to look through heaps of financial records. You might overlook GST requirements or some other financial documents that may end up causing your business multiple tax implications.
Have accounting professionals work on your bookkeeping, and you can expect accurate, unbiased, and chronological financial records practically all the time. With such consistent bookkeeping, it will be easier for your small business to qualify for loans, document profits & losses for your taxes, and, more importantly, prove regulatory compliance.
Bookkeeping takes a lot of time.
As a small business owner, you handle tons of tasks daily. From monitoring your business operations to marketing and logistics, you may have to put out multiple fires at once. So, where does bookkeeping fall in your daily schedule? It’s not something you can cram only when it’s near tax season. Because if you do, you’re likely to miss deadlines and incur late penalties. Alternatively, focusing on bookkeeping can take a lot of your time. It’s wiser to leave this task to an in-house accounting staff or third-party accounting services. After all, you should be focused on what you’re good at to sustain and grow your business.
We’re here to help.
It’s time to stop doing the bookkeeping yourself. Leave it to the hands of professionals like us. We provide expert accounting, bookkeeping, and tax services that will save you time, money, and stress. Our team utilizes industry-leading software to organize and track your business finances, making it easy for you to make quick decisions for your company.
Let us begin with a no-obligation consultation. Contact us today to book your schedule.