If you’re just starting out in business – or if cash is particularly tight at the moment – you might be tempted to handle all those time-draining bookkeeping duties yourself.
While it’s noble to want to keep costs to a minimum, it could end up damaging your business in the long term, not to mention sending your stress levels sky high.
You should only consider keeping the management of your books in-house IF:
You have a good handle on your income and expenditure
If cash flow is good, and you have a good understanding of what’s coming into your business and what you need to spend money on every month, then you may not need the services of a bookkeeper as much as somebody who feels like their finances are out of control. That said, things can quickly change – especially if you go through a hectic period or start experiencing unforeseen challenges within your organisation that need your full attention.
Hiring an external bookkeeper means you won’t need to monitor every single transaction yourself; somebody will be keeping an eye on things for you and will alert you if cash is becoming an issue or those expenses are stacking up.
You’re happy for your bookkeeping tasks to cut into your spare time
DIY bookkeeping is time-consuming, and it’s not always something that will fit into your average business day. If you want to continue doing your books yourself, you must be prepared to set aside time during your evenings and weekends to get the job done. So, if your work/life balance is important to you, you should definitely consider drafting in some outside help!
You’re comfortable crunching the numbers
Some people shy away from anything that involves maths of any kind. Other people look forward to working on their books, because it gives them a welcome break from their daily responsibilities. If you fall into the first category, then that’s fantastic – but most entrepreneurs choose to outsource their bookkeeping because they know they don’t have the skills, the experience, and the headspace to deal with their finances on top of everything else.
You’re open to automating your systems and processes
As I mentioned in a recent blog post, there’s nothing honourable about keeping your finance records on spreadsheets – or, dare I say it, pen and paper! There are plenty of great bookkeeping tools out there that can help to lighten the load. If you’re happy to explore them and you’re open to adjusting your way of working, by all means continue working on your books yourself. But if you know you’re going to struggle to get to grips with bookkeeping technology like Xero or QuickBooks, my biggest piece of advice to you is, let a bookkeeper take the reins as soon as you can afford to contract them, otherwise you’ll be wasting SO much of your time and brainpower unnecessarily!
You’re OK with getting your head around all the rules, regulations and write-offs
From calculating accurate tax payments to working out what you can legitimately put through as business expenses, there’s a lot to consider when you’re doing your books yourself, particularly if you want to make sure you’re running things as tax efficiently as possible. This is where the knowledge of a bookkeeper really comes into its own; somebody who knows this stuff can often end up paying for themselves in terms of the savings they can generate for you (and the paperwork they can take off your desk).
You’re 100% sure you won’t miss any tax deadlines
Life is busy, and (hopefully) your business is even busier. With so much to juggle, it would be easy to drop the ball by forgetting to submit your self-assessment, missing your PAYE deadlines, putting off your VAT returns, or, if you’re a limited company, filing your accounts and managing your corporation tax payments. There’s a lot to remember, and the worst thing is, if you DO miss a deadline accidentally, you’re likely to be fined.
It’s just you within the business, and you’ve not taken on any staff yet
Hiring new team members brings with it a whole new world of processes and deadlines, because you need to make sure you submit your PAYE figures and filings and your National Insurance payments accurately and on time (and, of course, pay your staff without any delays). If you’ve managed up until now without a bookkeeper, now’s the time to enquire, because PAYE can be a real head-scratcher.
You can see what I’m getting at, right? There’s so much to consider, and unless you’re super confident in your bookkeeping abilities, you’re bound to come unstuck at some point.
