Tax season is almost here so you might be wondering if you should try to do your taxes yourself or hire someone to do it for you. You might even think, “there are plenty of other things I can DIY, why not my accounting too?” I have put together a list of pros and cons of doing it yourself in hopes that it gives you a better understanding of whether you should do it yourself or not.
Cheaper. The most obvious positive of doing your own accounting is that you will save some serious money since hiring a professional can be expensive. This might be a good route if you own a small business as your reportings go on your personal tax form anyways.
Learning Opportunity. If you are like most owners, you would probably rather spend your time focusing on other aspects of your business; however, this can be a great learning opportunity if you are interested in doing the bookkeeping for your business. Nerdwallet, Credit.com, and Bankrate are all good resources to consider if you’re interested in learning more.
Know Your Business. As the owner, you should know how your business is doing and there really is no better way to understand your business’ health than getting into the nitty-gritty of your finances. This is also a great chance to learn exactly where your money is being spent and what revenue streams are bringing in the most so you can adjust your expenses. Having a high level of knowledge on your business’s finances will help you create a more accurate budget for the next year.
If you are considering doing the accounting for your business, then make sure you understand these basic terms from Business News Daily.
Time-consuming. Doing your own accounting can be an extremely monotonous task, especially if you do not have time to do it during normal business hours, leaving late nights and weekends dedicated to accounting functions. This also means taking time away from seeing the big-picture of your business and not being able to focus your time and energy on growing your business. I haven’t even mentioned the time it might take away from your family or your favorite hobbies.
Lots of Risks. There is a decent amount of risk involved if you’re new to accounting, as you might not know all of the technical aspects required. As new laws and regulations roll out, it can be difficult to stay up to date on all of them and fully understand the implications. Professionals are required to understand new legislation and its effects. Just a reminder that there is no such thing as a small mistake; even the small ones can have huge repercussions.
Stress. Ultimately there is a lot of stress that can be involved when it comes to doing your own taxes if you are not sure exactly what you are doing. Without planned breaks and stopping points in your tax preparation and filing work, it can lead to potential errors in your math and possible deductions.
Specific Skills Needed or Training. If you are an entrepreneur then your most developed skill is most likely not in accounting, which is okay! But that means you might need to do some training before you start attempting to do it all for your business. You might even need to purchase and learn new software before getting started. To give you a head start, here are 5 Useful Accounting Tips for Small Businesses.
Now that you know some of the big pros and cons of DIY accounting you can make an informed decision on whether you should try to do it yourself or seek a professional’s help! Remember if you are choosing to hire a Certified Public Accountant (CPA) to choose one with a good track record as you want to avoid any mistakes.
If you have any questions about transactions related to your TSB Bank account just give us a call and we can do some of the research leg work for you and get you a detailed printout and log of account-based activity.
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