Nowadays, teaching yourself how to do something is as easy as clicking a few buttons. There are YouTube tutorials and blogs galore produced by self-proclaimed experts. With so many resources, it seems like you can find an online course in pretty much any subject. Learning to do something DIY lets you acquire great skills from online hobbyists.
However, some arenas are best left to the pros. Managing accounting and business financials are at the top of this list.
As entrepreneurs, many business owners are setting out to do things their own way. This can be a great attitude when establishing a business model and brand identity. However, it is imperative to the success of your company that you have a licensed accountant on your team.
Companies of all sizes and levels of success fail when they don’t build a viable accounting system. Building an effective system takes time and energy. Too often, the second that business begins to falter, financials plummet into disarray. Stay ahead and protect your business by establishing a ground-up accounting system from the get-go.
Not convinced? Here’s why we strongly encourage you to avoid DIY accounting. It’s a surefire way to limit or, even worse, destroy your business.
Accounting Is More Than Just Tracking Money
Novice business owners might attempt to handle accounting matters on their own. In doing so, they often neglect to harness the full power that successful and well-constructed systems provide. Intelligent accounting systems do a lot more than just track where the money goes and write paychecks.
Especially in today’s world, data is endless. Analysts can gather and utilize this data in whatever way necessary. This means that businesses can gain keen insights into their operations through financial frameworks.
The numbers you see in a DIY accounting system may tell you about sales in a particular season or year. However, loose numbers alone cannot tell you where your pitfalls as a company exist.
With intuitive accounting foundations in place, your company can gain useful information. You can use this data to shape choices moving forward from a well-informed and evidence-based standpoint. Nothing speaks to shareholders like data. A DIY accounting system just doesn’t cut it when it comes to assuring yourself for the future.
Intelligent Cash Managing
There’s a lot more to successfully managing money than checking a bank account balance. Knowing what cash you have to spend is a step in the right direction. But, it is often where DIY accounting structures leave off. In accounting, the journey to genuine knowledge of a business’s financials is much more arduous and intricate.
As a small business begins to grow, it becomes more necessary to manage cash flow correctly. Sure, little mishaps with cash handling of a small company may not lead to disaster. However, the larger the company, the bigger the impact of financial mistakes.
That’s why it is essential that companies establish good money handling principles from the beginning. That way, the company can retain adequate liquidity as it grows. A well-crafted accounting plan will ensure the money is there when you need it, not just right now.
If you truly want your business to succeed, don’t leave anything up to chance. Be smart in handling your cash and plan ahead proactively. Make sure you have strong financial systems in place. You’ll see your chances for sustainable success instantly increase tenfold.
Compliance with Government Regulations and Laws
Any company should have strict and consistent financial frameworks in place. Without them, there is a greater chance your company will slip up with important money matters. DIY accounting often has a negative effect on payroll, tax calculations, sales and beyond.
Some of this is a mere nuisance. But other parts are extremely risky to get wrong and don’t allow for much forgiveness. When it comes to government compliance, it is essential that you get it right the first time.
Your company probably isn’t trying to cheat the system. However, without a thorough structure in place to manage financial data, mistakes can easily happen. These mistakes put even the most ethical of business people at risk. If you don’t want to put your company in legal jeopardy, establish systems now. Ensure you prohibit any sort of non-compliance, regardless of intention.
Research shows that fraud is far more prevalent in small businesses than large corporate organizations. Certainly, the annual revenue of small and corporate businesses differ dramatically. However, the median lost revenue to fraud is the same across the board. This is because small businesses generally have far fewer fraud prevention systems in place.
This is particularly true in companies that utilize DIY financial methods. Without a dedicated system in place to prohibit fraud, it is likely happening. Often, it will be happening right in plain sight.
Organizations of varying sizes lose an average of 5% of annual revenue to fraud. Over time, this can add up to a sizable amount of money lost. Plus, it typically takes close to a year and a half or two years to detect fraud. If you don’t have specific systems in place to prevent it, it’s highly likely your business will fall victim to fraud.
Do It Yourself, But Leave Money Matters to the Experts
It truly takes a brave spirit and sharp mind to get a company off the ground and turn it into something real. The DIY attitude can be hugely empowering and freeing for business owners. It is this exact attitude that has led to some of the greatest innovations the modern world has ever seen. However, it is also a great sign of intelligence to play to your strengths while knowing your weaknesses.
If you are not a certified accountant, it is best to leave the tax, accounting, and bookkeeping services to the experts. DIY solutions won’t protect your company and assets like an accounting system will.
With smart systems set in place, you can assure your company’s longevity and prosperity and rest easy.