As much as you may want to run your business operations single-handedly, rarely is it a good idea to do so.
While you may find some processes simple, straightforward, and not overly time consuming, many of the tasks associated with accounting can be complex, and if not handled with due diligence and understanding, could result in the wasting of valuable time and money.
If you’re convinced that by not working with an accounting firm in Coral Gables, you could save your small business time, money and energy, you should ask yourself these 4 questions first:
1. What is the anticipated number of monthly transactions?
Although you can’t possibly know for sure, having a good idea of how many transactions you expect to deal with every month, can help you determine whether you can manage the tracking of them yourself, or whether you might need professional help. Businesses in their very early stages may find transaction tracking easy, but as they grow, the need for accuracy grows with them.
If you opt for tracking transactions using accounting software, consider that it comes with a fee (just as an accountant does), takes time to set up and get to grips with (unlike hiring an accountant), and may have features that you’re paying for but aren’t able to use thanks to your lack of accounting knowledge.
2. Is there someone else who can verify your work?
Accurate financials are crucial to your businesses success and overall health, and if you’re not qualified to make the necessary calculations, it might be time to hand over the reins to a professional, especially in the absence of a qualified second pair of eyes to assess and verify your calculations.
3. Are your accounts separated into business and personal?
It’s always a good idea to have a separate account for your business finances, and another for your personal, particularly when it comes to simplifying the tax filing process.
If as a business owner, you decide to go ahead and do your own accounting, it’s imperative that you assess your existing process. If you don’t yet have separate business and personal accounts, you should definitely consider setting them up.
4. Do you know much about tax deductions for businesses?
Unless you’ve got specialist tax and accounting knowledge, which most business don’t have, you could easily miss out on a range of tax deductions that could help you save a whole heap of money on your tax bill. While you can research your eligibility and claim what you are legally able to, this can take a lot of time; time that you likely don’t have as a busy entrepreneur.
What you might lose in deductions, you could have spent on investing in an accounting firm in Miami.
A lot of the decisions made by small businesses that later prove not to be fruitful, advantageous, or even workable – such as choosing not to hire an accountant – are made as a result of trying to save money. Now, while saving money is obviously a valid reason for not choosing to work with professional accountants, when you look at what can happen when you don’t and what you stand to lose, rarely does it present itself as a sound financial decision made for the betterment of the business in the long term.
