So, you’ve embarked on your entrepreneurial journey, and you’re juggling a million things at once. From setting up your business and acquiring your first clients to maintaining a strong social media presence … being an entrepreneur is no walk in the park.
Then someone asks you: who’s your bookkeeper? You’re standing there without an answer. Hiring a professional bookkeeper will cost you, and if you’re just starting, you need every dollar to run your business. Therefore, the burning question arises: can I do my own bookkeeping?
I’ll cut it short: YES, you definitely can. Nothing is stopping you from doing your own books. However, here are some key points to consider:
1) Time, time and time
It’ll take time to do your bookkeeping. Despite all the rumours, bookkeeping is not just a pressing-a-button-and-done type of work. Running a business is time-consuming enough as it is. So, be honest with yourself: will you have enough time to do it?
No worries, I believe you. Let’s assume that you do allocate sufficient time for your bookkeeping regularly. How much does it cost you?
Have you ever considered the value of your own time?
What could you have done in that time slot? Maybe you could’ve met with a potential client, or worked on your product, or had a coaching session? Remember, time is money, after all, so be realistic when it comes to managing your valuable time.
I’d suggest you block out time consistently in your calendar for bookkeeping: weekly, fortnightly, monthly – depending on the volume of transactions. If you’re not blocking out the necessary time for doing your books, you’re likely to procrastinate, as I bet you’d rather do a batch of Instagram posts than start reconciling the bank transactions. In a blink, you’ll realise that you’re so much behind with your bookkeeping. Then you’re less agile to do the mundane tasks, which results in an exaggerated lag, making you frustrated and anxious. Not so inspiring, is it?
2) Consistency is key
Consistency is crucial when it comes to bookkeeping. You need to treat similar transactions uniformly and let me tell you, oftentimes, this is much more challenging than you might think. If you keep changing how you record transactions and where you allocate them, you’ll be facing a complicate tax time, not to mention that your financial records will be meaningless.
Messing up your books can have serious consequences down the line, especially when it comes to taxes, audits, taking out bank loans or getting investors or partners into your business. One wrong entry could lead to immense headaches, serious discrepancies in the financial statements and horrendous effort (and money) to correct.
Maintaining accurate accounts is crucial not only to avoid potential compliance issues and paying penalties but also to have a clear overview of your financial position and make informed decisions for your business.me to get a nice discount and save some money for your business.
3) Steep learning curve
The user-friendly cloud-based accounting software and certain influencers might make you believe that bookkeeping is a breeze. “You simply click a few OKs on the bank reconciliation screen, and here and there, and voila, you’ve finished.”
Well, the reality is quite different.
You need to learn the basics of bookkeeping. Like understanding what a balance sheet, a P&L, or a chart of accounts is. You must also familiarise yourself with the basic accounting principles such as debits and credits, assets and liabilities, income and expenses, cash or accrual basis. Additionally, you need to learn the accounting software you use. Even the most user-friendly accounting software has specialities you need to discover. So be prepared for a steep learning curve.
4) Numbers
I dislike stating the obvious, but bookkeeping is all about the numbers. So, if you hated maths in school or struggled with numbers, you may face significant challenges while doing your own books. Not impossible, but it’s important to acknowledge and tackle these challenges head-on. You don’t need to be a math guru, but at the end of the day, the accounts must be balanced and any variances must be investigated and handled.
5) Empowerment
Last but not least, I must also add that it’s incredibly empowering to be in control of your own finances. You don’t have to wait for the bookkeeper to update your records. You will have an immediate insight into how your money flows, which clients are behind with their payments, and what your overall financial position is. Remember: Knowledge is Power. You’ll be empowered to make informed decisions on the go because you know your numbers.
Takeaway
You can definitely do your own bookkeeping, especially if you are familiar with the basic bookkeeping principles and the accounting software you chose is easy to use.
Consistency is critical: make notes or check previous records to ensure you record repeating transactions exactly the same way.
Finally, please remember: you need to dedicate enough time to do your bookkeeping, and don’t procrastinate when it comes to bookkeeping.
I believe in You: you’re a champion 🏆
