Has Your Business Outgrown DIY Accounting?

When you first start a business, doing your own bookkeeping and accounting can make sense. But as your business grows, the financial side can look very different from when you started.

What may have made sense to tackle yourself with a spreadsheet and accounting software may become difficult to maintain over time. Here are some signs that it may be time to hire a bookkeeper or accountant for your business.

You’re always playing catch-up on your bookkeeping.

One of the clearest signs is that your books are consistently behind. Maybe you plan to reconcile everything at the end of the month, but suddenly it’s three months later. Receipts are waiting to be categorized. Transactions haven’t been reconciled. And you’re not completely sure whether your financial statements reflect what’s actually happening in the business.

Good records can help business owners monitor their progress, prepare financial statements, and help with documentation come tax time.

Conversely, you may be spending too much time on the books and not enough on what needs your attention. As a business owner, your time is valuable. If you’re spending the majority of your workweek trying to sort out expenses, you may be neglecting customers, employees, sales, strategy, or growth.

Your business needs have become more complicated.

The more your business grows, the more important accurate financial records become. Your financial statements can help you decide whether you should hire a new employee, whether a service is profitable or not, how much you’ll need to set aside for taxes, and more.

Current financial information can’t solve every cash-flow challenge. But it can help you understand what’s happening and give you better information for deciding what to do next.

You’re surprised come tax time.

If tax season is when you first discover how profitable your business was, your accounting and tax planning may be operating too far apart.

Accurate, current financial information gives you a better foundation for tax projections and planning throughout the year. That becomes especially important as your business grows and your tax situation becomes more complicated.

Why it may be time to hire a bookkeeper or accountant

For many business owners, running your own bookkeeping is a practical way to start. If your books are current, your transactions are manageable, you understand your financial statements, and keeping everything organized doesn’t interfere with running the business, DIY accounting may still work for you.

The question is whether your accounting process is still serving the business you have today.

At Chatterton & Associates, our Business Solutions team brings bookkeeping and accounting together with tax planning and business financial planning. The goal is to give business owners financial information they can use — not just at tax time, but throughout the year — so they can focus on numbers that can help move their business forward.