5 Questions You Should Ask Before Doing Your Own Bookkeeping
If you run a business, you know how important bookkeeping is. You have to keep your records straight. If you don’t it causes more problems than just tax headaches; you won’t know where your money is going, or if it’s being put to good use. If you run a small business, or are just starting out, it’s tempting to try and save money by doing your own bookkeeping. According to Dragon Financial, a bookkeeping company in Portland, Oregon, this isn’t always a good idea. Before you decide to be your own bookkeeper, you should ask yourself these five questions.
1. Do I Have A Background In Accounting?
Bookkeeping requires more than just basic math skills. You also have to be good at organizing records and analyzing data. Do you have the skills in this? Do you know how to analyze your data, determine what should go together, and keep all that information straight? If you can’t do that, then it doesn’t matter if you can add the figures together. Records will get misplaced and lost. It’s very easy to slip up on this. If you don’t have the mathematical and organizational skills, you should look into hiring someone who does.
2. Do I Want To Learn Bookkeeping?
As previously stated, bookkeeping is a lot of related skills. Math, organization, analysis, and concentration. You can learn to do all of these yourself. The question is, do you want to? Do you want to spend time learning how to do all this when you could hire someone else to do it for you? How much time do you want to spend and how will you learn these skills? Hiring an expert is certainly easier.
3. Why Do I Want To Learn Bookkeeping?
Maybe you do want to learn bookkeeping. Okay, fine, no one says you can’t, but you should ask yourself why. There are plenty of reasons to want to learn bookkeeping. It can be useful in managing your personal finances. The organizational and analytical skills are cross-applicable to many other parts of life. Maybe you just want to better yourself by learning a new skill.
But there are reasons you might want to learn bookkeeping that aren’t good. If you want to learn bookkeeping because you don’t want to trust someone else, that’s going to have other problems. Running a business requires delegation, as no one can do everything alone. Wanting to learn it to have control is another bad reason, as it can put you in the habit of trying to micromanage everything. Before you try to learn bookkeeping, make sure you’re doing it for a good reason that helps your business.
4. What Is My Time Worth?
Division of labor is one of the economic practices that has allowed for great success in American business. Every task in a business takes time to learn and everybody has different aptitudes for learning different tasks. Trying to have one person do multiple tasks can be time consuming and inefficient. So, before you try doing your own business bookkeeping, ask yourself, is this the best use of my time? Perhaps it would be better served for you to focus your efforts on running your business and find an expert to handle your bookkeeping for you.
5. What Is the Goal of My Business?
People run businesses for different reasons. Sometimes, hiring a bookkeeper isn’t really needed depending on what you plan for your business. If you’re interested in growing your business, a bookkeeper is very helpful for giving you insight into the best choices to maximize profits. It will allow you to focus more on management, which helps you make more money. Not everybody’s in it to grow or make tons of money. Sometimes, people are satisfied with a small-to-moderate size business, or simply do it because it’s what they love doing. If you’re not interested in strong growth, doing it yourself might be a valuable way to keep things in-house. If you’re interested in getting bigger and making more money, a bookkeeper will help you do that.
So, Do You Want A Bookkeeper?
Whether you should hire a bookkeeper, or do it yourself, there are pros and cons either way. Doing it yourself is more work for you and it limits your time. A bookkeeper frees up more time for you, but it costs money and if you’re not prepared to grow your business, the growth can build up to more than you can handle. Your decision should be made based on your skills and your goals for your business. That’s why you should ask yourself these five questions before you make up your mind. This will help you determine if hiring a bookkeeper is the right decision for you.