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DIY Accounting VS hiring an Accountant
There are a lot more types of accountancy and support services available for small business managers on the market now then 5 years ago. Small business managers can work with a specialised accountancy company, hire a freelancer or work with one of the hundreds of DIY accountancy software available. On one hand, it may seem easier to take the job into your own hands and save some money, especially if you just opened your business and you also need to invest in other areas of your business. On the other hand, making mistakes in accountancy is really costly, so you might end up loosing more then you saved, if you don’t have experience in accounting or bookkeeping.
The choice range has increased, so let’s take a look at what to choose if you own a small company.
Understanding what you need
First, in order to make a decision, you have to understand what your business needs. Depending on the size of your business, you can decide if you need help with the bookkeeping, accounting, return production, tax calculations etc.
How much do you know?
Your experience as a small business manager is relevant here, since the more you know, the less help you may need. Also, it depends if you have the time to do the bookkeeping yourself, or you rather spend that time managing the core of your business. Before you decide weather to hire an accountant or DIY, ask yourself a few questions such as: Do you have time to learn about tax and account categories? Do you know how to record liabilities when purchasing equipment for your business? Can you easily discover errors and fix them? Can you easily navigate trough tax software to handle depreciation and asset sales? Do you know how to correctly prepare the payroll? If you answered no to most of the questions, you should consider working with a specialised accountant.
Understanding the providers offer
Once you know what type of advice and guidance you need to do the accounting for your business, it then can be quite a challenge to work out what the accountants are offering. For instance, you can choose to do your own record keeping, bookkeeping and return production through the year and then hire an accountant for making the year end returns. Our advice is to try to find out exactly what services you need and then ask for an offer from a specialised accountant company. Also, when you need to decide if you want to hire an accountant or do it yourself, you need to think about how much your time is worth. If you can make more money for your business in an hour than the fee of an accountant, you definitely should hire an accountant to manage your business in the most effective way.
Remember, in some cases DIY accounting may cost more then hiring a professional, even if it seems to be the opposite way around in the beginning.