Pros and cons of DIY bookkeeping

Every business needs bookkeeping and many should at least consider hiring a bookkeeper. Here are some pros and cons of DIY bookkeeping for your small business.

Pros

It keeps you more in touch with your own business 

If you do your own bookkeeping, you will have a better understanding of what drives your business, where the strengths and weaknesses are, and hopefully what you can do to improve it. In software engineering this is often referred to as ‘dogfooding’ or being ‘closer to the metal’. The more you are engaged with the finances of the business, the better you will understand it.

You can understand bookkeeping processes better

Like any skill, the more you practise, the better you will become. Even if you decide to hire someone later, having this understanding will help you to keep on top of things

You can do things your own way

Not everyone thinks or acts the same way. This is true in all areas. It may be that the way you prefer to organise your finances doesn’t mesh with standard bookkeeping practices.

Now let’s talk about the cons..

Cons

It consumes your time

You are a business owner and a manager. You don’t have the time to spend on keeping your accounts straight. Time is something that we can’t make more of, no matter how much we make.

You will make mistakes 

If you are not an expert, it’s easy to mess things up. Even with modern cloud-based accounting solutions, if you need to pay someone to fix your mistakes, are you really better off than just paying them to do the job to begin with?

It can cost you more because it has to be corrected 

As bookkeepers we are often asked to come in and correct errors and issues with customer files. It always costs more to fix it, than simply to do it right to begin with.

The choice between hiring someone and just doing it yourself is not an easy one. At the start, it’s common to just try to do it yourself. But there is a tipping point where paying someone is the better option. As the great Cosmo Castorini once said, ‘It costs money. It costs money because it saves money”

If you need help with your bookkeeping, contact us today.

Disclaimer

This information is intended to be general in nature and is not personal financial advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided having regard to your objectives, financial situation and needs.