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The risks of DIY bookkeeping

Every business owner wants to cut costs – after all, surely it is better to receive greater rewards for the efforts you make. However, is sacrificing the work of an accountant worth the risk? Accountants can make your business both financially sound and efficient, they give you guidance on getting ready to grow and on how to cope with downturns, and the amount of additional savings they find in tax is often greater than their annual fees.

Here are a few reasons you should consider hiring an accountant, rather than doing the books yourself.

It isn’t your best skill

If you are a business owner, your skills probably lie more in the realms of people management, product development, business strategy, and marketing. However, accounting and bookkeeping are very different kettles of fish.

This leaves you with one option; if you choose to do your own accounting, you need to learn how to keep your own books. This can take a long time and there’s no guarantee that you’ll do it right. Let’s face it, if accounting was what you are passionate about, you’d be an accountant.

Accounting takes time

Your time is valuable, especially when your business is still in its formative years. Given the choice between having your head buried in your accounts or time spend productively working on your business, there really is only one clear choice.

Having a professional accountant keep your books will give you more time to improve your service, make more sales, and take home more money.

You could make mistakes

With accounting, mistakes can come in all shapes and sizes. What you definitely want to avoid is making the kind of mistake that can land your business with a serious penalty from HMRC.

The laws surrounding taxes are constantly changing with tax breaks being opened and closed all the time. A professional accountant keeps on top of all of these changes whilst making sure that you pay not one more penny than needed to HMRC.

The size of the penalties that HMRC can impose on a business are enough to cause serious harm.

Inefficient bookkeeping

It is possible that you are overpaying HMRC. There are a whole host of different expenses that you can claim for which you might miss if you are attempting to do your accounting yourself.

Additionally, accountants can help you keep more of the money that you have earned through efficient salary/dividend splits. You do have to pay an accountant to do this, but more often than not, you will recover those costs because you’re paying less to the taxman, especially in the long run.

You need the right tools

If you are doing your own bookkeeping, you will almost certainly need to use some form of HMRC-approved software. Most bookkeeping packages cost money (which is an additional expense for your business) and even then, there is no guarantee that you will know how to effectively use that software.

An accountant will not only look after your books for you but they will also teach you how to use their software of choice. At TWP Accountants, we use Xero, an award-winning software whose features we’d love to demonstrate to you.

We can help

If you would like more time to spend working on your business, leave the accounting to us. We will happily make your business as tax efficient as possible, while we handle all of the books. Call us today on 01932 704 700 or email us at service@twpaccounting.co.uk

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