DIY Accounting For Small Business – Can You Really Do It Yourself?
Are you considering DIY accounting for your small business? There are a few easy things you can do that will set your small business up for success. Here’s a quick guide to DIY small business accounting essentials that all small business owners should be practicing.
Should You DIY Your Accounting as a Small Business?
Before we dive into our DIY accounting tips, it’s important to determine whether the DIY route is right for your small business. While doing it yourself can seem like an obvious money-saver, if done incorrectly it can cost you a lot of time and money down the line.
Unorganised record-keeping, unreconciled accounts, forgotten transactions, late payments, and not backing up your financial data are all easy ways that small business owners can get into trouble. Without diligent and accurate bookkeeping you could unwittingly be committing tax fraud, or missing out on key tax breaks, grants and more. Beyond that, having unreliable accounts may mean that the data you are tracking your business growth with is inaccurate, which can have implications for your overall business success.
The best way to determine whether managing your own accounts will work is to analyse just how high maintenance your financials are. Do you have multiple employees on your payroll? Does your business have many expenses?
For a relatively simple business with few overheads and a manageable staff, the DIY route could be a thrifty option. For more complex businesses, you may want to invest in the added attention and detail that a professional accountant can give.
Small Business Guide To DIY Accounting
Think your business is right for the DIY accounting route? Doing your own bookkeeping can be a great decision for your business, especially if it’s relatively new. It gives you the chance to get to know your financials and have a base understanding of your accounting needs.
This is essential knowledge for all successful business owners, keeping them in the know even as their business grows and they begin to outsource their accounting. Here are our basic tips to help you set up good bookkeeping practices that will keep your accounts in order even as you grow.
Use DIY Accounting Software
The easiest, quickest, and most effective way to DIY accounting for your small business is by using accounting software. There are many different platforms that you can use, from paid services like QuickBooks, MYOB, and Xero to free services like Wave. These will all allow you to easily keep track of your accounts to varying degrees of detail.
In DIY accounting, spreadsheets are your best friend. You may think that tracking all the essentials is what the accounting software is for but that’s not always the case. In reality, there may be key data that you’re missing by not keeping your own accounts. DIY accounting spreadsheets in combination with your DIY accounting software will allow you to keep thorough records that could help you read patterns of growth and optimise your business.
Separate Your Accounts
An easy way to simplify your small business accounting is to open a business account. Having a dedicated business account makes your bookkeeping process much easier by keeping all your expenses and income in one place. Not only can you clearly see what is happening financially in your business, but having a business account can also protect your personal assets in the case of an audit, lawsuit, or bankruptcy.
Speak To An Expert
Just because you are taking some of your business accounting into your own hands, that doesn’t mean you should manage it all. Business tax obligations can be complicated, especially when you have staff on your payroll and many expenses.
Bringing an expert onboard or even just outsourcing some of the work means you can rest assured. Not only will you know that all your tax obligations are met, but you can also gain access to valuable advice and strategy that will save you money in the future.
Remember, it doesn’t have to be all or nothing. Many businesses do some of their bookkeeping and accounting in-house while outsourcing the bigger jobs that take specialist expertise. Book a free consultation with our accounting experts to determine your DIY small business accounting needs.
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