As a small business owner, you are accustomed to doing everything yourself. However, when it comes to small business accounting, this is where you need to call for backup and start working smarter, not harder.
Here’s a list of reasons why DIY small business accounting is not a good idea. Let’s start at the top, shall we?
Time Is Money
Seriously. You just don’t have the time to wear every single hat of running a business and do the accounting as well. No matter how good you are at math, bookkeeping is a tedious, time-consuming process. A large chunk of time needs to be dedicated to keeping your books organized, up-to-date, and not to mention — accurate.
Are you doing your own accounting in an effort to save money? You probably cost your business more money than you are saving. The right technology can handle accounting and free up your time so that you can focus on growing your business. Lastly, if you rush through accounting, you are setting yourself up to make errors.
Accounting Errors Are Costly
According to a recent study from Indiana University, 60% of business accounting errors are the result of basic bookkeeping mistakes.
Accounting requires that you are thorough and check all the details, which is hard to do when you are short on time. The last thing you need is to make errors that cost your business money.
Try as you may, but in DIY small business accounting, mistakes happen. Payments can fall between the cracks which result in fines, late fees, and duplicate payments. Other common errors include transactions not getting recorded and receipts that are misplaced. All these errors do not give you an accurate picture of what is happening with your business so that you can budget accordingly and make well-informed business decisions.
Payroll Needs To Run Smoothly
Payroll is more than writing checks to employees. That element of your business is important as you need to ensure your employees are being paid on time and that you stay in compliance.
Where payroll gets especially tricky is the taxes. Between the W2s and 1099s, the withholding of federal, state, and local taxes, and filing on time, payroll taxes are a massive undertaking. On top of that, if you make a mistake, the IRS can audit your payroll, and you could end up paying penalties. Audits by the IRS are not only costly, but they take up time, and energy, and are incredibly stressful.
Virtual Small Business Accounting
Redmond Accounting has cloud-based technology that can help you clear the paper clutter and optimize your small business accounting infrastructure. We offer several packages to help owners use their time more effectively, including bookkeeping, payroll, CFO, and virtual controller services. Curious about what the difference is between a controller and a comptroller? Read our previous blog post: Controller vs. Comptroller – Key Differences.
To learn more about how we can easily modernize your accounting process, schedule a consultation and speak to a virtual accounting expert. Our professionals are ready to help you!
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