{"id":1600,"date":"2024-01-02T10:00:00","date_gmt":"2024-01-02T10:00:00","guid":{"rendered":"https:\/\/ctt-group.co.uk\/accountancy\/?p=1600"},"modified":"2024-01-18T14:55:30","modified_gmt":"2024-01-18T14:55:30","slug":"diy-bookkeeping-is-it-worth-it","status":"publish","type":"post","link":"https:\/\/ctt-group.co.uk\/accountancy\/diy-bookkeeping-is-it-worth-it\/","title":{"rendered":"DIY bookkeeping \u2013 is it worth it?"},"content":{"rendered":"
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Bookkeeping is a task that leaves a lot of SME business owners feeling divided.<\/p>\n

On the one hand, doing your own bookkeeping is a way of understanding your small business\u2019 finances. It also saves on the expense of paying someone else to do it for you.<\/p>\n

On the other hand, bookkeeping is a technical, time-consuming job. If you\u2019re not confident in all aspects of it, the wasted hours and risk of costly errors far outweigh the benefits of doing it yourself.<\/p>\n

Here, we\u2019ll look at the different areas of bookkeeping, the skills and knowledge required to carry them out, and whether a DIY or professional approach is the best way to take care of your SME\u2019s books.<\/p>\n

Data entry<\/strong><\/h4>\n

The introduction of bookkeeping software, like Xero and QuickBooks, has made it easier for small business owners to carry out their own data entry \u2013 recording the money coming in and going out of the business.<\/p>\n

Most digital bookkeeping platforms are capable of drawing information from bank records and uploading scanned paperwork. This makes staying on top of your business\u2019 transactions more straightforward and reduces the risk of losing receipts and invoices.<\/p>\n

This is an admin-based task that requires regular updating. It\u2019s a good way for small business owners to keep an eye on the business\u2019 finances. However, it can quickly become tedious and time-consuming as your business grows \u2013 and an incorrect entry can cause headaches when it comes time to do your reconciliations.<\/p>\n

Although not technically demanding, data entry is an aspect of bookkeeping you may wish to outsource alongside your other accounting services to save you time and unnecessary hassle.<\/p>\n

Reconciliation<\/strong><\/h4>\n

This is the process of comparing your recorded transactions with the bank\u2019s, cross-referencing them, and spotting and amending any discrepancies.<\/p>\n

Digitisation has sped up this process, as bookkeeping software allows you to draw information directly from your bank statements and compare it with your own records. However, once an error is flagged, it\u2019s down to you to identify the reason and reconcile it. This can be fiddly and frustrating, especially at the end of a long day running your business.<\/p>\n

Like data entry, reconciliation isn\u2019t a difficult bookkeeping task, but it\u2019s likely one you won\u2019t miss when you decide to seek professional help. It also pays to have as second pair of qualified eyes go over your reconciliations to make sure they balance, so outsourcing this aspect of your bookkeeping is beneficial.<\/p>\n

Accounts receivable<\/strong><\/h4>\n

Accounts receivable is something many SME business owners do for themselves. Writing up invoices and sending them out to clients can be an enjoyable task while your business is relatively small, and the job can be made straightforward with templates and accounting software.<\/p>\n

Invoicing clients yourself is a good opportunity to connect with your customers and strengthen business relations. It\u2019s also a personal boost to see your numbers grow as you begin to take on larger orders.<\/p>\n

Chasing outstanding invoices, however, can be less pleasant. And as your business grows, accounts receivable is another bookkeeping job that\u2019s better outsourced. This way, you can focus your energy and expertise on running your business and ensure you stay time-and cost-efficient.<\/p>\n

Accounts payable<\/strong><\/h4>\n

If you have limited business expenses, settling your own invoices is a good way to keep control of your costings. However, if the bills start to mount or cashflow becomes a problem, a professional accountant will be able to offer you advice on how to manage \u2013 and reduce \u2013 payments.<\/p>\n

At CTT Accountancy, we offer a holistic approach to managing your accounts that will give you a clear overview of your business. We can help you find ways to cut unnecessary costs and recognise areas of your business primed for growth and investment to keep you moving forward.<\/p>\n

Payroll<\/strong><\/h4>\n

Using the government’s PAYE (Pay As You Earn) system is the easiest way to ensure you stay HMRC compliant while paying employees.<\/p>\n

It automatically deducts your employees\u2019 Income Tax and National Insurance payments from their salary and sends these to HMRC. It also produces a digital paper trail that shows everyone on your payroll is up to date with payments on their earnings.<\/p>\n

Although PAYE is automated, it can be difficult to calculate it correctly, especially if you have adjustments to make for things like sick pay or maternity leave. Unless you have a dedicated member of staff qualified to do payroll, this is a bookkeeping job that\u2019s best outsourced to ensure it\u2019s completed accurately and on time.<\/p>\n

At CTT Accountancy, we have a dedicated PAYE team who can take care of your payroll, ensuring your employees receive the correct payment in a timely manner and you\u2019re always HMRC compliant.<\/p>\n

Tax returns<\/strong><\/h4>\n

There are seven different types of business tax, and your business could be liable for more than one. The taxes you owe will vary depending on the amount of profit you make, your business structure, and how you choose to pay yourself as the business owner.<\/p>\n

Furthermore, when your company’s circumstances and profit margins shift, the taxes your business must pay might also change from year to year and even from quarter to quarter.<\/p>\n

Keeping track of your own taxes as a business owner is a challenging and time-consuming task. Although accounting software can help smooth the process, it still relies on a degree of knowledge and competency when entering the required information.<\/p>\n

When filing your own taxes, you also run the risk of losing out on valuable tax breaks and deductions to which you or your business may be entitled. And the late or incorrect payment of taxes can be costly, either through over payment or fines.<\/p>\n

For these reasons, tax returns are an area of bookkeeping that\u2019s best outsourced to a professional accountancy service. This way, you can be confident in your compliance as well as enjoying the benefits of being tax efficient.<\/p>\n

At CTT Accountancy, we support our clients with everything from Income Tax, NI, and PAYE to Corporation and Capital Gains Tax. We provide a comprehensive, customised approach to developing a tax-efficient plan for your business, helping you save money at every opportunity.<\/p>\n

Financial reports<\/strong><\/h4>\n

Financial reporting is the process of tracking, analysing, and reporting your business income. It can help you make important decisions about how to grow and develop your business. It can also provide investors with an insight into the overall health of your business and make a strong case for securing funds.<\/p>\n

Because financial reports must be seen to be accurate and transparent, they must conform to International Financial Reporting Standards (IFRS). This is a group of legal, tax, and accounting requirements that enable anyone in the world to understand your business finances.<\/p>\n

Unless you have a qualified in-house accountant, Financial Reports are the remit of outsourced professionals. As well as ensuring your financial reports are produced to the required international standard, a professional accountancy service will help you:<\/p>\n