Stories of business magnates starting out in suburban garages with nothing but a whiteboard and a dream have become the stuff of legend. We small business owners wear all of the hats, all of the time.
That’s commendable, inspiring, and keeps things cost-effective, particularly in start-up territory.
This DIY mentality (or DIAY – do it all yourself) can be hard to let go of in our professional and personal lives when we get used to the sense of control and satisfaction that comes with the doing-of-it-all.
The downside? It’s exhausting, and we can’t all be experts at everything. So, we risk mistakes and expensive redos.
Trying a tiled feature in your kitchen splashback? Sure, why not?! The worst that can happen is that you’ll hire a professional if you do a dodgy job.
But re-soldering your vintage record player? It could work, or you could kill the thing for good.
So, your bookkeeping… You can try your hand at it, but should you?
Signs you should do it yourself
You’re a natural with a lot of time
Let’s get the obvious out of the way – if you are a wizard with numbers and you have the time, then doing your own bookkeeping might be a breeze.
That being said, bookkeeping is more than being good with numbers.
You need to learn the art of accounts, cashflow, reconciling, how to categorise GST for each transaction and be fastidious with receipts and bills.
Learning how to do business bookkeeping isn’t a matter of teaching yourself how to use a piece of software like Xero for bookkeeping (which takes time in itself). Official bookkeeping training — the kind that covers all bases and allows you to continue as your company scales — can take up to 2 years.
So even for the number nerds, you are unlikely to master your books overnight.
Also, know this: Maintaining your books takes consistent care and attention. It’s not something that you can set and forget—your books need nurturing more than once a quarter, even more than once a month.
You work with limited transactions
The most common sign that you may be able to do your own bookkeeping is when you work with limited transactions. As in, you’re working with just a couple of accounts, simple comings in and out, you’re not managing employees or huge cash flow considerations.
Your operations are simple
Similar to the above, is that sometimes your business is just you (and maybe a trusty virtual assistant). You might have a sole income stream with straightforward pricing and invoice terms. Stuff that’s easier to set up so you can replicate processes and reconciliations without worrying about payroll, super, BAS etc.
Your budget is tight
Sometimes, you have no choice but to do your own books. While a professional bookkeeper is cost-effective, it’s still an expense. If you need to manage your own books until you have regular clients and can afford to hand them over to someone else, then so be it.
Just be ready to recognise when you the opportunity cost of not delegating your bookkeeping is stopping you from having the time to work on income-generating work.
You are a control freak
Okay, we’re only being half-serious here. Sometimes business owners prefer to have sole control and oversight over their financial records, which is understandable. Again, if you opt to retain direct control, then EXTREME due diligence is necessary so as to avoid compliance issues and ATO penalties.
Note: when outsourcing, most successful small business owners form very close relationships with their chosen bookkeeper so that they can gain a full understanding of things like their profit and loss, and cash flow. Dollars + Sense takes a holistic approach to bookkeeping and we empower our clients to understand their numbers and the state of their business.
Signs you shouldn’t do your own bookkeeping
No head for numbers
The reality is that to some of us, numbers may as well be hieroglyphics. You’re a creative, a visionary, an operational superstar. None of us are excellent at everything. As any successful business owner will tell you, knowing what to delegate is a superpower.
Let’s reframe: Giving up a bit of control by delegating will give you more time for the stuff you excel at.
Intricate financial activities
If you are working with a high volume of transactions, multiple employees and contractors, different revenue streams or complex inventories – then DIY bookkeeping is inadvisable.
You are not across laws, regulations, compliances
Knock, knock, who’s there? It’s the ATO.
Australia’s taxation system is intricate and ever-evolving.
Changes to laws and regulations happen frequently.
If you lack expertise in this area and don’t keep updated on ATO requirements, your books could end up littered with errors and you could suffer the doom and gloom of compliance hell.
Of course, an excellent bookkeeping service provider (cue Dollars + Sense) will keep you in the loop about changes, and ensure that you feel empowered and have a birdseye view over your financials.
No time
We’ve already mentioned it, but it bears repeating: bookkeeping takes time, consistently, especially for a non-professional bookkeeper. The more you grow, the more time your nose will need to be in the books.
You want insight
An outsourced bookkeeping service doesn’t only alleviate your worries, saving you time and money day-to-day, it can also offer invaluable financial insight and analysis.
These conclusions can spark action, promote better decision-making and reveal unexpected paths to business growth.
This is your sign: Ask us if it's time to outsource your bookkeeping!
Bounce your unique situation off a Dollars + Sense expert today
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