Ways You LOSE Money When You Manage Your Own Accounting

Your business is made of many moving parts, and doing everything yourself can be stressful, discouraging, and worst of all, money-draining. DIY bookkeeping, in particular, can even be more troublesome and expensive if you get it wrong.

Is your business really doing as well as you thought? Here are some ways you lose money when you do your own accounting:

Incomplete Books

As your company gains traction, you as the owner become busier so it’s not unusual to overlook a missing receipt or two. Trying to match your books can be overwhelming when the logs are incomplete and your receipts are all over the place. Spending time trying to unravel small business accounting will eat up much of your time and when as a business owner, your time is currency.

Speaking of time, keeping track of time and labour needed to keep your business running requires a keen eye to make sure that every cog in the machine is working efficiently. If you’re doing the accounting yourself, you may feel justified with the current operational set-up, even if the books and best practices don’t agree. Having an objective insight may help you find a better solution to make your company more efficient.

Mistaking Cash Flow For Profit

Business is booming and sales are coming in — but why does it feel like you’re still strapped for cash? Many entrepreneurs make the mistake of thinking that just because they’re making the sale, they’re already earning profit, disregarding operational expenses like rent, payroll and utilities. Doing your own books can lull you into a false sense of security just because there seems to be money coming in. Professional accountants are trained to analyse the data, so you don’t only get expert bookkeeping services, you’re also getting a clear diagnosis of your company’s financial health.

Confusing Business With Personal

One of the accounting basics is to never confuse your business accounts with your personal one. With small business owners, however, the reality is that the lines blur: sometimes, your store needs petty cash that comes straight out of your pocket, and some expenses meant for the office double as your personal time. The problem starts when you can’t track the difference between your personal money and the company’s and you might be dipping into your capital without knowing. Not only will this make your accounting a headache, it may also land you in trouble with the IRAS.

Late Filing And Other Penalties

If anything, one of the biggest draws of hiring an expert accounting and tax services company is that they are the ones responsible for filing the taxes on time.  Filing your taxes can be pretty complicated, and doing it yourself can make you miss the deadline. At the same time, mistakes in your filing process and documentation can incur hefty penalty fees, which are just a waste of money for not doing it right the first time.

While the temptation to do everything yourself is strong, it pays to have experts deal with your company’s books. Besides freeing headspace so you can concentrate on running your company, it also saves you money in the long run.

For expert accounting and tax services run by professionals, check out scs-cpa.com.

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