Are you self employed or are you considering it? Do you handle the bookkeeping by yourself? Are you seriously considering buying accounting software? Before you tackle the challenges of bookkeeping, ask yourself the following questions:
- "What type of business do I have?"
- "If somebody approached me with a similiar business as mine, would I be willing to do their bookkeeping?"
- If the answer is, "No, I'm not willing to do their bookkeeping," then ask
- "Why not?"
Here's my first bet: you don't want to do bookkeeping for another company, even if it is the same type as your own.
Here's my second bet: the reason you don't want to do bookkeeping for another business is because you know you are inadequately trained for the job. What if you made mistakes? How does this sound: incorrect income taxes, incorrect sales taxes, and incorrect employment taxes? Don't forget the potential for penalties and interest on those incorrect taxes, and the time involved to file amended tax returns. And how about the pure embarrassment of going through all that? You shudder at the thought of it.
And yet this is exactly your position if you are not trained thoroughly in accounting principles, yet do your own bookkeeping.
Ask this question: "If I don’t feel comfortable doing bookkeeping for someone else, why am I doing my own?" How wise would you consider a business owner who found a plumber (or a lawyer, or a retailer, or whatever you are) to take care of the books to save some money? How well would that business do? How long would it last?
You've seen it, that popular accounting package in the membership warehouse store. Can you hear it, sitting patiently on the shelf? It whispers, “You need me. You don’t need to know anything about accounting to use me. Just think how much money I'll save you, and how easy I’ll make things.”
Be careful about falling for the “do-it-yourself” seduction. That well-known package doesn’t tell you several important things:
1. Which version? Software packages may list version differences on the back of the box, but you may not clearly understand what these differences mean, or more importantly, their ramifications for your unique business.
2. Getting it right? There no internally established system for double checking your entries, so you have no way to be certain you are doing them right. Even if you get the entries mostly right, ask yourself: is mostly right good enough for my business? Is mostly right the most profitable course of action? Is mostly right an acceptable defense in an IRS audit?
3. Substantial set-up. That box does not clearly state that there is potentially a substantial amount of setting-up that remains after the initial set-up "interview," and that this process involves unfamiliar terminology that isn’t clearly explained. This is especially true for product-based companies.
4. No tech-support. Most readily available packages are packed with terrific features at an incredible price, but something important may be missing: technical support. Be sure to factor this into your decision before buying.
5. Still need an accountant. The software box does not tell you that you still need an accountant. Far too many people, to their business’s detriment, make the assumption that having accounting software eliminates or greatly reduces the need for an accountant.
Ask yourself one final question: "Which does my business deserve: a plumber (or lawyer, or retailer, or whatever you are) taking care of the books, or a competent and caring bookkeeper?" The health and future of your business may depend upon your answer.
About the Author:
Do you have a specific accounting or QuickBooks problem? Would you like to see an article written about it? Jennifer A. Thieme invites you to contact her today with your accounting or QuickBooks article suggestions. Resolving accounting or QuickBooks issues is her specialty.
Email her today to receive a free initial consultation, free QuickBooks software trial, and a free payroll processing quote.
She’s the owner of Solid Rock Accounting Services and has been in the bookkeeping, income tax, and payroll business for nine years. She’s a Certified QuickBooks Pro Advisor, and a Registered Tax Preparer. Her clients receive QuickBooks training, general bookkeeping, income tax, and/or payroll processing services.
Visit http://www.jenniferthieme.com today for contact information.
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