5 Ways DIY Bookkeeping is bad for Business and Growth
by Nura Lee Bookkeeping servicesAccording to a U.S. Bank study, a
whopping 82% of companies that failed cited income problems as an element in
their failure. As for brand spanking new businesses, 50% company during year
one, in part, because they didn’t understand basic bookkeeping. In fact,
majority of business owners are inexperienced in bookkeeping, but many prefer
to do their own books anyway.
Here are five reasons why DIY
bookkeeping might not be right for your business:
Inaccurate Bookkeeping
Being small business owner requires
you to wear many hats, the responsibilities can often cause you to
procrastinate financial matters, which are often eventually pushed to the side
and forgotten. As stacks of paperwork, receipts, invoices compile, it leads to
irregularities like not updating books regularly, late filing of invoices,
mistakes in payroll, or having receipts with no correct supporting information.
Moreover, Online Bookkeeping
Services in Baltimore or maybe the littlest clerical error can often end in miscalculating profits. This
example can snowball over time and cause loss of profits as unpaid invoices is
left unnoticed, straining vendor relationships and making tax seasons, an
enormous fuss! These irregularities raise red flags with the IRS – leaving you
susceptible to audits and penalties. Inaccurate bookkeeping fails to offer you
a firm grasp of your business’s financial status, resulting in poor business
decisions that significantly hamper growth.DIY Bookkeeping Out on Limb
Lack of experience
Accounting is tedious,
time-consuming, and requires a particular level of experience to be done
correctly. Presumably, you're not QuickBooks certified ProAdvisor or a
bookkeeping expert. Albeit you took accounting in college, it’s probably been a
short time, and without a full understanding of the newest tax updates, you'll
find yourself making costly errors. You’ll trust accounting technology
platforms to be sufficient, but that too requires a steep learning curve for
you to properly use it.
Last-Minute Tasks & Missing
deadlines
Small business owners need to
tackle a myriad of tasks and presumably see bookkeeping as a chore. This might
end in missing deadlines or late filing of taxes. Since excel spreadsheets or
pen and paper is preferred route to take care of records, there's usually poor
organization and recordkeeping of invoices and receipts, which if don’t add up
prevent you from having the ability to say expenses. Without accurate records,
misplaced invoices, it takes longer to arrange and send invoices, thus
increasing your invoicing cycle.
Lack of your time
Most small business owners take
up DIY bookkeeping because they believe that this is often the foremost
cost-effective. However, time is money for little business owners as they have
all the time they will get. You actually shouldn’t be wasting some time on
bookkeeping. You ought to be focused on what you're good at in your business
and growing it.
Cost you more within the end of
the day
Most small business owners have a
standard misconception that they will economize by doing Online Accounting
Services on their
own. The truth is that DIY Bookkeeping, within the end of the day, finishes up
being more costly and leaves you hospitable tax issues, hefty penalties, and
income problems. Without accurate, up-to-date accounting records, DIY
bookkeeping will seriously limit your financing options and impede your growth.
So what does one do?
Choosing an outsourced
bookkeeping service provider gives you instant access to a pool of certified
accountants, experienced altogether aspects of small business bookkeeping. We
are just a call away to assist you achieve financial success and long-term
growth.
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Created on Feb 15th 2021 02:15. Viewed 485 times.