Sunday 25 September 2011

Why you shouldn't do bookkeeping yourself

We have a confession to make. As an accountant, doing bookkeeping, VAT returns and accounts for our own accountancy firm is always the last thing in our mind.

Of course, as an efficient accountant, we always do our VAT returns, accounts and tax returns in time.

However, if doing bookkeeping is the last thing on the "things-to-do" list of an accountant like us, we can't see why an ordinary small business would have the enthusiasm and commitment to do the bookkeeping job for their own business.

Here are the reasons why you shouldn't do bookkeeping yourself:


Time-consuming

You may decide to keep your books of accounts using excel spreadsheets or other accounting software such as ClearBooks, FreeAgent and KashFlow.  However easy to use spreadsheets or accounting software, you still have to sit in front of your computer, flipping through piles of invoices, receipts and bank statements and entering each transaction into your computer, and it takes time and effort.

Assuming the number of transactions of your business is around 1,000 per annum, which is approximately 80 per month.  If it takes you at least 90 seconds to post a transaction into your computer, it will take you at least two hours to post all the transactions in the month. 

Can't you think of a better way to spend two hours in your life than sitting in front of your computer burying your head in piles of invoices and receipts?


Money-wasting

Many people are tempted to do bookkeeping themselves, thinking that by doing so, they can reduce the fees their accountants charge them.  We can tell you that it is completely a myth.

If you decide to use accounting software, you will end up paying licence fees for the software.  If you use excel spreadsheets, your accountants will try their best to find "flaws" on your spreadsheets in order to justify the extra time they spend to correct your "flaws" and therefore the extra fees they charge you.


Are you a competent bookkeeper?

Are you a well-trained bookkeeper? If not, how can you be sure that you've done your bookkeeping correctly? If you've got it all wrong, who is going to clear the mess for you? Your accountants? If you ask your accountants for "help", aren't you giving your accountants an "excuse" to charge you a fee for "helping you out"?


Bookkeeping is the last thing on your "things-to-do" list

For many people, doing books of accounts is the absolute last thing in their mind and for no particular reasons, they always leave it until the last minute to start doing the work.  Needless to say, they are very likely late on filing their accounts and tax returns and end up paying penalties for late submission.


Bookkeeping is very boring

To be honest with you, as an accountant, we can tell you  bookkeeping is very boring.  A well-trained bookkeeper is "well-trained" not only because they have the required level of bookkeeping knowledge to do the job but also because they are "trained" to "sustain extreme boredom".

All we can say is bookkeeping is not a job for everyone.  Although many people may perceive it as an "easy job", it is definitely boring and is not everyone's taste.

Because it is boring, a "non-trained bookkeeper" (i.e. an ordinary person lie you) tends to lose concentration while doing the job and as a result mistakes are made.  It is extremely time-consuming to find the mistakes and correct them accordingly.


What if mistakes have been made

To locate the mistakes you have made on your spreadsheets or accounting data must one of the most frustrating things you come across in your life.  After posting 1,000 transactions into your computer, you notice something not quite right and conclude that mistakes have been made.  However, you don't know how many mistakes you have made nor do you where you have made the mistakes.  Isn't it driving you crazy?

Alternatively, you may approach your accountants and scream for help.  What will happen next?  Your mistakes will be corrected at the expense of your wallet.



So if bookkeeping is so time-consuming, cost-inefficient and boring, why are you still doing it when you can ask cheap accountants like us to do it at a cheap price?

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