Business Owner?

Why DIY Accounts Can Cost You BIG?

Why DIY Accounts Can Cost You BIG
Written by Pauline Ho

We often get enquiries from small business owners who have a problem. Usually, they have a little mess that needs cleaning up. (And sometimes they have a huge mess that’s accumulated for years, including decades of tax returns they have avoided until an ATO lawyer rang.)

Aside from the clean-up job that they simply can’t do on their own, they sometimes still answer “no” to this question: Do I need to hire an accountant?

It is such a bad mistake.

Entrepreneurs whose books and accounts are in a mess are taking a big risk with their business. Often, they they think the business is doing better than it is, because they can see money trickling in. Worse, some use business bank accounts like their own personal spending account. This is craziness – it makes sorting out business expenses almost impossible and it can conceal other, serious problems in a business.

My business is small. Why not just get someone to clean up the accounting and books every year or two?

Because it costs you in money, time and business growth. Really.

The most awful things about “DIY” accounting (or the all-out avoidance of proper accounting, bookkeeping and taxes) are:

  1. It costs more in accountants’ fees to sort out messes (compared to having it managed ongoing),
  2. it distracts you from paying attention to your core business, and
  3. it eats up your time and energy worrying about it — that energy should be channeled into positive business activities like making your clients happier.

Many small business owners start out doing everything themselves.

This can become risky, if small mistakes in business structure, books and accounting are left to grow into bigger problems.

Accumulating problems without getting expert advice can create the blueprint for a future failed business.

Article reference:

About the author

Pauline Ho

Pauline Ho was born in Hong Kong and educated in Hong Kong and the United States. She is a U.S. CPA in both Florida and Washington states and a U.K. Chartered Accountant. She has a Bachelor’s of Science in Accounting from Hong Kong, a Master’s Degree in Business Administration from Andrews University of Michigan, and a master’s Degree in Accounting from University of Central Florida.