Hire an Accountant vs Doing Your Accounting
Running a small business means making smart money choices every day. One of the most important is whether to hire an accountant or handle the books yourself. Your choice impacts time, costs, and the accuracy of your financial records. In this blog, we will explore both paths: working with a professional and managing your accounts. So you can decide which option fits your needs best.
Why the Accounting Choice is Important
- Strong Base for Business
Good accounting forms the base of any business.
It helps you see the true health of your company. - Helps Track Money and Plan
Clear books let you track cash, file taxes on time, and plan for growth.
They also help you make smart spending choices. - Dangers of Weak Accounting
Poor accounting can cause record errors, late filings, and lost chances.
It can lead to fines or financial surprises. - Picking the Right Method
Small businesses must choose between hiring an accountant or using DIY tools.
The choice affects both time and cost for your business. - Benefits and Drawbacks of Each
Both choices have their own pros and cons.
Knowing them helps you pick the best fit for your needs. - Long-Term Gains of the Right Choice
Knowing the difference saves money, cuts stress, and sets up long-term growth.
It also builds trust with partners, clients, and banks.
When should I appoint an accountant?
Assess Your Situation
Check your business needs to see if a bookkeeper is needed. Think about your business type, size, growth, and costs. This helps you know the level of support you need.
Consider Your Expertise and Time
Ask if you have the skill and time to manage accounts. If not, help from a pro can save stress and prevent mistakes. Time saved can go to growing your business.
Benefits of Hiring a Bookkeeper
A bookkeeper can handle income, costs, and banking tasks. They keep records safe, help with audits, and update statements. This makes sure your books are correct and up to date.
Handle Cash Flow Efficiently
Bookkeepers track cash flow and ensure bills are paid on time. This keeps your business running without delays. It also helps avoid cash shortages.
Hiring an Accountant for Growth
An accountant can set goals and track business growth. They prepare year-end reports to show your company’s health. This supports smart choices for long-term success.
Make Informed Decisions
With an accountant, you can plan based on real data. They give insights to guide your future moves. Good advice helps you avoid costly errors and lost chances.
What Does It Mean to Hire an Accountant?
When you choose to hire an accountant, you bring in a skilled expert to handle your financial records. An accountant is more than just someone who manages receipts and bills. They provide valuable advice on tax planning, budgeting, compliance, and future strategies.
Services Offered by Accountants
- Preparing and filing tax returns
- Managing payroll for staff
- Reconciling bank accounts
- Tracking expenses and income
- Advising on cost control and savings
- Helping with audits and compliance checks
Why Businesses Hire Accountants
Many business owners hire accountants because they want peace of mind. Mistakes in tax filings or payroll can be costly. With an accountant, you have an expert who ensures everything is done right, saving time and avoiding penalties.
How do you handle an accountant?
Many professionals rely on their accountants to manage their entire accounting process. Still, it is advisable to overlook their work and help your practice thrive as well.
- Manage bookkeeping: keep track of the receipts and balance the checkbook. In addition to the professional guidance from your accountant, some items should be classified in the financial statements.
- Document Preparation: Doing the bookkeeping and documentation of your financial data yourself will make the cost manageable.
- Organize your records: Keep a good record of all of your financial transactions. It will help you provide your accountant with complete and accurate bookkeeping and automate your data efficiently.
- Strategic Business Planning: Engage in analyzing your business operations, exploring compensation and staffing, reimbursement rates, and establishing mechanisms to monitor financial performance, etc.
What Is Do-It-Yourself (DIY) Accounting?
DIY accounting means managing your books without hiring outside help. Business owners often use software like QuickBooks, Xero, or Wave to handle invoices, expenses, and reports.
Why Some Owners Choose DIY Accounting
- To save money on professional fees
- To stay more involved in day-to-day finances
- To keep control of every small financial detail
- To gain clear insight into how cash moves in their firm
DIY accounting is possible for small firms with simple structures. However, as the business grows, it becomes harder to manage alone.
Key Benefits When You Appoint an Accountant
Hiring an accountant comes with several advantages that go beyond just bookkeeping.
Accuracy and Compliance
Accountants know tax laws, filing rules, and compliance needs. They help you avoid errors that can lead to fines.
Time Savings
Managing accounts takes hours each week. By choosing to hire an accountant, you free up time to focus on sales, staff, and growth.
Better Finance Plans
Accountants give clear views on profit, cash flow, and long-term plans. Their advice helps you make wise money moves.
Smooth Tax Time
A key reason to appoint an accountant is tax preparation. They keep your books in line, find cuts, and make sure tax forms are sent on time.
Advantages of DIY Accounting
While hiring an accountant is helpful, DIY accounting also has unique benefits.
Lower Costs
The most obvious benefit is saving on professional fees. Small firms with tight budgets may find this appealing.
Full Control
You see every entry, expense, and change in real time. This gives you hands-on knowledge of how your money moves.
Useful for Simple Businesses
If your business is small and has few transactions, DIY accounting can be enough. Many apps now simplify bookkeeping and make it easy to stay updated.
Drawbacks of DIY Accounting
DIY accounting can work, but it also comes with risks.
High Chance of Errors
Without proper training, mistakes are common. Wrong entries or missed deductions may cost more than hiring a professional.
Time-Consuming
Money saved on fees may cost you time. Hours spent on books are hours lost for growth.
Stress During Tax Time
DIY accounting often becomes a challenge during tax season. Filing complex returns without expert help can be stressful and risky.
Hire an Accountant vs DIY Accounting: Side-by-Side Comparison Table
Factor | Hire an Accountant | DIY Accounting |
Cost | Professional fees required | Lower direct costs |
Time | Saves business owner time | Takes significant time |
Accuracy | High accuracy, fewer errors | Risk of mistakes |
Tax Planning | Expert advice, maximize savings | Limited knowledge |
Scalability | Grows with your business | Harder as business expands |
Stress Level | Lower, handled by a pro | Higher, all work on your own |
This table makes it clear: while DIY saves money, hiring an accountant provides long-term stability and peace of mind.
Case Studies: Real Examples of Both Approaches
A Startup Using DIY Accounting
A small online shop started with DIY accounting. The owner used free software to issue invoices and record sales. In the first year, this saved money. But as sales grew, errors appeared in expense tracking. Missed receipts led to confusion during tax season.
A Growing Firm That Hired an Accountant
A consulting firm with five employees decided to appoint an accountant. The accountant set up payroll, prepared tax plans, and helped reduce costs. Within a year, the business saved more money in taxes than the accountant’s fee, proving professional help added clear value.
Signs It’s Time to Hire an Accountant
Most small firms start with DIY books. But as they grow, tasks get harder. When records, taxes, or time feel too much, that is when you should hire an accountant.
Overwhelming Time Spent on Books
If you spend hours each week on sheets and tools, you lose focus on sales and clients. Hiring an accountant saves time and lets you put energy back into growth.
Complex Tax Rules
As firms grow, tax rules get tricky. Payroll, staff, and new rules can be confusing. A skilled accountant keeps you safe, avoids fines, and files with care.
Missed Growth Opportunities
Poor books can block plans for loans, staff, or deals. An accountant not only keeps numbers clean but also helps guide smart growth steps.
Tips to Choose the Right Accountant for Your Business
Check Their Experience
Pick one with a skill in your type of work. A retail shop has needs that differ from a law firm. The right fit helps you get advice you can trust.
Look for Tech Skills
Good accountants now use cloud tools like QuickBooks or Xero. If you appoint an accountant, check that they know these tools for smooth work and quick reports.
Ask About Fees and Services
Ask what is in their plan. Some do only tax preparation. Others give full support for books, staff pay, and planning. Make sure the fee and work match your needs.
Which Option Works Best for Small Businesses?
No one rule fits all. It depends on size, stage, and goals. For new or very small firms with few sales, DIY books may be fine. But once you add staff, more income, or face tax rules, the smart step is to appoint an accountant. DIY saves cash at first. But an accountant saves stress, cuts risk, and helps you grow with sound plans.
At Meru Accounting, we help small firms keep clean, reliable books, ensure timely and compliant tax filings, and provide smart growth advice. This gives you peace of mind and more time to focus on your core business.
FAQs
- Why should I hire an accountant for my small business?
Hiring an accountant saves time, prevents costly errors, and helps with planning for growth. - Can I use DIY accounting if I’m just starting?
Yes. Many small firms start with DIY accounting using apps. But as the business grows, it becomes harder to manage alone. - Is hiring an accountant expensive?
The cost depends on your needs, but the value often outweighs the fee. A good accountant saves money by avoiding errors and finding tax deductions. - Can an accountant help me during tax season only?
Yes. Some firms hire accountants only for tax filing. But year-round support brings better results. - How do I know if it’s time to appoint an accountant?
If accounting tasks take too much time, errors keep showing up, or taxes feel overwhelming, it’s time to hire an accountant.
