Bookkeeping is often the least favourite task for business owners, but it remains essential.
Bookkeeping, more often than not, can feel time consuming and menial. It generates no direct revenue despite the significant effort invested, but it is important to ensure you keep accurate financial records.
Choosing between hiring an accountant to help you with bookkeeping and doing it yourself (DIY) typically hinges on the answer to one question:
Does the value of the time saved and the improvements in accuracy outweigh the monthly cost of employing a professional?
However, using a bookkeeping service is not for everyone and there are some important caveats to understand.
When should you do it yourself?
If your business is a smaller operation, with straightforward numbers, DIY bookkeeping can help you maintain closer oversight of your finances.
For example, a sole trader with a limited number of clients and few expenses could often manage their own books, with just a few hours each month spent using cloud accounting software.
Similarly, where a business is in its early stages and not turning over a lot of profit, DIY bookkeeping could help to keep overheads down, freeing up money that could be invested elsewhere.
When should you hire a professional?
As a business grows, the admin grows with it, with more transactions, payroll responsibilities, VAT registration and growing income streams.
If you tick any of the following boxes, it could be time to bring an accountant on board to help with bookkeeping:
- You’re spending a lot of time on admin that could be better spent elsewhere, like serving clients or promoting the business
- You find yourself struggling to meet deadlines, with records that are falling behind
- You have hired your first employee or registered for VAT
- You already qualify for Making Tax Digital requirements or are due to fall within scope
Larger businesses often have higher stakes when it comes to financial reporting, which means bookkeeping errors can lead to incorrect tax returns and missed tax-deductible expenses.
At this stage, hiring an accountant can help your business operate more cost-effectively, as they can offer practical tips to manage a budget and cut running costs.
When it comes to filing end of year accounts and tax returns, bookkeepers can ensure there are no errors that could turn into major problems.
If you are noticing errors emerge in your books, hiring a bookkeeper can help you avoid unnecessary stress and potentially costly penalties.
Speak to an accountant
If you believe you could be earning more with the hours saved than a bookkeeping service costs, it could be time to hire an accountant.
You don’t have to outsource all of your responsibilities, as some business owners manage day to day entries themselves while relying on accountants to review their records quarterly.
Alternatively, you may want to delegate some specific unwanted tasks, like VAT returns or payroll.
Our accountants provide full bookkeeping support, tailored to match your business needs and budget.
Whether you need to outsource the entire process or only need a little support, we can help you keep your finances accurate and compliant.
Do you feel like your bookkeeping responsibilities are bogging you down? Speak to our accountants for cost-effective bookkeeping and accountancy solution