Every small business person has this dilemma: Do the books yourself, or contract a professional bookkeeper?
Lisa Martin from bookkeeping firm, GoFi8ure, examines the pros and cons of the DIY approach versus the professional contractor approach.
Pro: It’s cheaper. You don’t have to pay anyone. You do it yourself – often at night or on the weekends, but hey… at least it’s cheaper.
Pro: You can lodge and file the numbers and the paperwork any which way you want ‘em. Where they make sense to you and where (hopefully) you can find ‘em again (and hopefully understand ‘em).
Pro: If you’re a man and you like working with your wife, maybe it’s a job you can get her to do. You don’t have to pay her, but it makes her feel part of the business (which could make your life easier). If you’re a woman, you probably have more sense than to get your other half involved in doing your books!
Pro: You’re the boss. You need to know what’s going on. You need to be in control of every facet of the business (despite the fact you’re not quite sure what those complex new tax rules mean and how they affect you, but you’ll wing it. How bad can it be?).
Con: If you’re like most small business people, doing the books is probably not your best skill set. Otherwise you’d be an accountant, right? So it’s likely you will probably: a) put off doing the books, b) make a mistake in the books c) fail to file all the necessary paperwork with the proper authorities, and, d) mess up the management of your business’ finances.
Con: You risk a call from the IRD. Because you are not an expert and because managing your business’ financial affairs requires an expert, you could well end up falling foul of the IRD because you got things wrong, or didn’t do what you were supposed to do, when you were supposed to do it. All of which gets the IRD interested in you and that can cost you plenty, both in terms of hard cash and your stress levels.
Con: It takes time you’d probably rather spend fishing or golfing, or doing anything other than entering and filing receipts and calculating GST. How much is your time worth? What’s your mental health worth?
Con: You are not growing your business. Because you’re head down over the books, you are not out there doing the business, marketing the business and making money. You’re in here with your calculator and a complicated Excel spreadsheet that’s probably driving you mad!
Con: You are not managing your money and using it as wisely as you could do. Again, you’re not an expert at that – otherwise you’d be a banker, right? But professional, contract bookkeepers are experts at it and they can both save you money and make you money by advising you how to manage your company’s money.
Con: You’re probably causing yourself stress and sleepless nights. Yes, you’re saving money by DIYing it, but you’re probably giving yourself a headache you don’t need.
The bottom line
So, the bottom line, as we bookkeepers like to say, is; yes, you could DIY your company’s financial management, but why would you if you are serious about growing your business and making money?
Smart business people know when and where to invest to grow their business. The question is: Are you a smart business person, or do you believe you can DIY every job – and end up potentially doing none of them well?