Here’s what might happen when you try to save money by not hiring professional accountants for your small business.
Running a small business can be tough, and cost-cutting is one of the most common and difficult challenges that a small business owner will have to sooner or later deal with. Small businesses have to work within a limited budget and do not have the luxury of huge conglomerates with deep pockets. It can be very tempting to cut costs wherever possible, and professional accounting services may seem like an unnecessary expense.
Trying to do your own accounting or hiring the cheapest accountant in the market may seem like a good idea when you want to save money, but these tactics can backfire. Here are a few things that can possibly happen when you try to skimp on accounting.
You lose the peace of mind of working with a professional
It is understandable that you want to save money wherever possible and invest everything into the actual running of the business, but when it comes to getting an accountant, remember that you basically get what you pay for. Inexperienced and unqualified accountants tend to be cheap, so you may definitely save some money, but you will not have the same peace of mind that you would get from working with a seasoned professional. An experienced accountant who charges a higher fee may be able to work faster, and in the long run may even cost less.
Your bookkeeping suffers
If one of your employees has basic knowledge in accounting, you may think that it’s smart to put them in charge of bookkeeping. But the thing is, many in-house bookkeepers are clueless about what they’re doing. They may classify items incorrectly, used in appropriate headings, and may not be up-to-date on the latest accounting practices. At the time of tax filing, your accountant will end up charging you for correcting these mistakes and you may even include greater expenses in terms of both time and money to get the books in order.
You make unnecessary mistakes by doing it all on your own
Just to eliminate the expense of hiring an accountant, some business owners try and do everything on their own. You simply cannot keep books by throwing all your receipts into a shoebox. This often leads to the same disastrous consequences as having an inexperienced in-house bookkeeper. Not only that, when you do your own accounting, you may be unable to spend enough time on your core business.
You tend to leave it to the last minute
When you don’t have a professional accountant working for you, you may start going through and organizing your paperwork only at the last possible minute. When you let your paperwork get piled up like this, things can easily get lost, and you will also get so overwhelmed that you may simply give up.
By allocating a small budget for professional accounting, you will be able to keep your finances in order and also find enough time to take care of what really matters – running your business.