Why You Shouldn’t DIY Your Bookkeeping
When you run a small business, DIY is often your go-to way to get things done. For a number of important reasons, bookkeeping shouldn’t be on your list of DIY tasks. When you DIY your bookkeeping, you can keep an eye on your financial bottom line, which is beneficial. But only when you have the expertise to do it right.
Accurate bookkeeping records sales, receivables, and payables. It calculates your profits, your losses, your cash flow, and your company’s financial well-being. Making even a simple mistake in your books could lead to an audit from the IRS and paying extra money in penalties. Spickerman Bookkeeping has been in the bookkeeping industry for fifteen years and has seen it all. This is why I want you to consider these three reasons why you shouldn’t DIY your bookkeeping.
1. You may instigate IRS tax audits
It is impossible to anticipate an audit. But, if your returns fall outside the IRS norms, they will look into your financial records. So, if you make any mistake while filing your returns and fail to catch it, you could end up dealing with the IRS. For example, if you are deducting expenses that are non-deductible, you may face an inquiry from the IRS.
2. You could end up owing more
Making business decisions based on inaccurate bookkeeping has a domino effect when it comes to seeking loans and investing in new equipment. Once the IRS audits you, you may end up paying more in taxes, interest, and penalties if you are not able to dispute their claims. All in all, you end up taking on more liability than you ever anticipated.
3. You may need to incur additional expenses
If you mix business and personal transactions, you could create a nightmare for your tax person. Business accounts should be used for business purposes only. If you do use the business accounts for personal transactions, it could be reflected as a sign of misuse after scrutiny from the IRS.
Do things right - Hire a professional!
An experienced and professional bookkeeper is proficient in financial processes. They are very detail-oriented and comfortable with crunching numbers. They understand debits and credits and why certain expenses are deductible and others are not. They know to balance bank accounts and credit card accounts to verify all revenue and expenses and ensure they have been accounted for. They have an eagle eye for numbers, and any discrepancies will be investigated. Also, they are familiar with financial processes per the IRS guidelines. If something doesn’t look right in your records, they have the experience necessary to be able to figure out why.
When hiring a bookkeeping professional, the cost will vary depending on the volume of work needed to be done. Some will charge an hourly rate, and others will charge a flat monthly rate. You will need to check your area for current rates and payment plans. Just remember, investing in a professional bookkeeper is always worth it in the long run, as you end up saving and gaining way more than you initially invested.
If you are looking for a virtual bookkeeper or QuickBooks pro advisor in the USA, then reach out to me at Spickerman Bookkeeping. I have over fifteen years of experience in the bookkeeping industry. My focus is on my clients and their needs. I listen to their concerns and help to find solutions for them. My clients are very important to me, and I provide them with all the necessary information they need to be profitable in their industry. Maintaining financial records is the last thing that a business owner wants to deal with while running a business. However, it is absolutely necessary for all businesses. I offer services such as QuickBooks set-up, training, bookkeeping catch-up/ clean-up, reviews, and reports. To learn more about the services I offer, please click here. If you have a question, I would love to hear from you. Please contact me here.