Very few people love bookkeeping. What a shame. However, if you do love bookkeeping then you should get out of your business and be a bookkeeper. Otherwise, get out of bookkeeping and focus on your business. I’ll tell you how after I list the 5 biggest problems with doing your own bookkeeping.
- Hiring and training bookkeepers is a hassle.
Small businesses don’t have the resources to properly train a new bookkeeper. The business owner usually doesn’t know how to evaluate bookkeeping talent. The prospects are not tested for their knowledge and references are seldom properly contacted and evaluated.
- Just when someone learns the job, they leave.
Turnover is a very serious problem. The business will not get the needed continuity or quality needed if there is frequent turnover in the bookkeeping position. This also results in several people that no longer work at the business that know confidential information about the business. Small businesses can not afford the constant turnover in any position, much less a position that deals with confidential information.
- Can’t afford a qualified full-time bookkeeper.
Hiring an unqualified bookkeeper is obviously the wrong answer, even though this is frequently what a small business does. Hiring a part-time bookkeeper has drawbacks. Frequently, the part-time bookkeeper will not be available when the business owner needs information. The part-time bookkeeper may have allegiances to other employers and may not being truly focused on your business.
- The business owner doesn’t have timely and accurate information to make decisions.
The business owner is prone to make more mistakes with inaccurate accounting information. Either the information will be misleading, or the business owner will make decisions not based on facts but rather on the business owner’s intuition. Too often this results in a business failure.
- A company’s books won’t withstand an IRS audit.
Many tax preparers prepare returns assuming the underlying accounting is good. They don’t test or check any of the numbers. Upon an examination, the IRS reviews every material amount with a very critical and skeptical eye. Many small business books can’t hold up to such scrutiny.
David M. Snyder, CPA, ASBC
The Tax Axe, LLC