When implementing an accounting system such as QuickBooks, a business owner must decide whether to manage it on their own or outsource it to someone else. While there isn’t a single best answer that applies to all businesses, there are some factors a business owner should consider before deciding to do it themselves with QuickBooks.
To help you determine what’s right for your situation, let’s review some of the advantages and disadvantages of doing QuickBooks on your own.
Advantages of Doing QuickBooks on Your Own
There can be definite advantages to doing your own bookkeeping in QuickBooks. Depending on the stage of your business, your availability to keep up with the bookkeeping, your comfort level with using accounting software, your personal level of organization and attention to detail, and your understanding of accounting and bookkeeping in general, you may experience the following:
You Save Money
A business owner who is just starting out may find outsourcing accounting and bookkeeping services costly. Doing QuickBooks yourself can eliminate that expense, and if there is a low volume of transactions and complexity, this may be the simplest and best option.
You Stay Involved
Doing your own bookkeeping will keep you connected to your finances, an area that can easily get lost in the day-to-day running of a business. You will be closely monitoring your online bank and credit card balances, seeing how much money you have made or lost, and identifying who owes you money, or what money you owe. You may be able to make more timely decisions for your business, including identifying issues or future growth opportunities.
You Learn Accounting & Bookkeeping Practices
For those business owners who are interested in adding to their personal skill set, doing your own accounting can be extremely helpful. You’ll learn skills that will serve you well in the early and growth stages of your business, and should the time come when you no longer want to handle the books on your own, you will know what you want from an outsourced accounting/bookkeeping service.
Disadvantages of Doing QuickBooks on Your Own
The benefits of doing your own accounting come with some downsides as well:
It’s Time-Consuming
According to data collected by SCORE, 40% of small business owners spend more than 80 hours per year on their accounting. Most business owners will find that they do not have the time to keep up with their own bookkeeping and run their business.
On top of recording transactions and analyzing data, you will likely have to spend time teaching yourself what you don’t know. This includes information about using the software and accounting in general.
If you don’t know best practices for using your software, you’ll waste time and miss out on essential information that could be used to grow your business.
You’re on Your Own
Maintaining QuickBooks yourself means you will have to teach yourself what you don’t know. You won’t have an expert to consult for issues or best practices in the use of the software. You won’t have someone knowledgeable in accounting concepts that would be useful to your business. Having someone to confirm appropriate accounting treatment is key to running your business.
Business owners also need to make sure they can create meaningful financial statements at tax time to provide to their accountant, to obtain loans, and to and comply with other governmental reporting requirements such as sales taxes and 1099s at year-end.
Additionally, if you do something incorrectly in QuickBooks, don’t know how to fix an error, or are unaware you are even making an error, you may find that you need an outside resource to identify or correct things. These mistakes can be costly not only to correct but can impact the financial information on which you are basing your business decisions.
You Could Miss Growth Opportunities or Areas for Improvement
Your QuickBooks file is full of information that can help you grow your business. Not knowing how to create and understand the available financial reports may mean that you’ll be missing growth opportunities.
In addition to identifying growth opportunities, the financial information in QuickBooks can also provide insight into areas in need of improvement. If you aren’t catching these signs, you are missing out on the full value of your books.
Partnering with a QuickBooks Expert
While the do-it-yourself approach works for some business owners, most find at some point that bookkeeping is just not their thing or they don’t have the time it takes to keep up with on a regular basis. They may have also found that they have created issues in the QuickBooks file they can’t correct and are not getting the financial reports they need to run their business and comply with governmental reporting.
In the long run, they may end up spending more money by having done it themselves with clean up and catch-up work that may be required to correct mistakes, improve accounting processes, and make their books current.
Additionally, most realize that they started their business to fulfill a passion or meet a need, not to manage finances.
So, if handling QuickBooks on your own isn’t for you, look to an experienced accountant. They can help by:
Understanding Your Numbers
Experienced accountants are just that—experienced. They know how to properly manage books and take time to learn your numbers to better position your business for success.
Knowing Best Practices
Experienced accountants know the best practices for QuickBooks and can use them to your advantage.
They can derive essential information from your books and utilize it to build strategies to grow your business.
Saving Time and Improving Efficiency
Outsourcing your bookkeeping to an accountant allows you to spend time doing what you love: running your business.
You’ll see improvements in efficiency because they make fewer errors and can spot and correct those errors quickly (if there are any).
Suggesting and Implementing Additional Third-Party Apps
If additional third-party applications would be helpful for creating efficiencies within your business, your accountant can make sure you build a tech stack that easily integrates with QuickBooks. This is essential should you choose to automate more of your financial system.
Look to SIMPLY Financials PLUS
In the end, no matter what approach you take, SIMPLY Financials PLUS can help.
If you want to do QuickBooks on your own but have gaps in your knowledge, we can train you. If you want to learn accounting best practices, we can teach you. When your business grows and you can no longer do it on your own, we can do it all for you.
Contact us today to learn more about what we can do for your business!