The Dangers of DIY Bookkeeping
One of the key areas that business owners tend to target when trying to cut costs is book-keeping. Many small business owners can see cutting outsourced book-keeping costs as a clever way to balance their books. However, trying to save money by doing book-keeping for your business yourself can more often than not actually end up costing you more in the long run. Even a simple book-keeping mistake can cost you time and money to try to recognise and amend. Book-keepers have a very important role. They are responsible for helping businesses to mоnіtоr their саѕh flow, mаking sure taxation laws are met аnd keeping important financial rесоrdѕ uр to date so that you can mаnаgе уоur buѕіnеѕѕ effectively and efficiently. Still thinking of resorting to DIY book-keeping? Here are some of the key “dangers” posed:
Insufficient Knowledge of Taxation & Accounting Principles
A thorough knowledge of accounting and taxation principles is required to minimise the potential risk of inaccuracies when conducting payroll or book-keeping duties. While you may think that you are doing great by saving money by taking book-keeping duties into your own hands, in the long run your insufficient knowledge of taxation and accounting principles may cost you in the long run. Inaccuracies in processing wages and producing account statements can lead to penalties from the relevant tax authorities.
Trying to conquer all of the book-keeping tasks of your business by yourself can result in you missing important tax deadlines. When you’re not exactly well versed in book-keeping duties, it is easy for things to get on top of you and miss important deadlines as a result. Unfortunately missing important tax return or accounts deadlines can land you into trouble with authorities. Missing deadlines can result in fines and sometimes even a court appearance.
Failure to Keep Accurate Records
When it comes to book-keeping, keeping accurate records is incredibly important. In fact, some government authorities require that you keep records of certain tax and accounting records for sustained periods of time and that these records can be made available for inspection on request. When committing to DIY book-keeping, keeping accurate records is an absolute necessity, but unfortunately, unless you have adequate off-site facilities and a high quality back-up system, doing so can prove costly. Many business owners do not have such facilities at their disposal and can find themselves losing important data very easily.
Issues With Accounting Software
One major obstacle for business owners who choose to tackle book-keeping themselves is mastering the use of accounting software. When you know how to effectively use an accounting software package, it can really speed up book-keeping and make it a much easier task. However, if you don’t know your way around an accounting software package, book-keeping can seem like a nightmare. From the offset, many business owners choose an accounting software package that doesn’t completely fit their needs so not only do they have to master the art of using the software, but they must also learn how to make it somehow work to their needs.
Aaardvark Accountancy Services offer a range of services including an outsourced bookkeeping service. To find out more call us today on 01 457 8138 or email email@example.com.