DIY accounting vs hiring an accountant: make the right choice for your business
- Jul 8
- 4 min read
As a new small business owner, you might be tempted to handle your accounting yourself. Employing a professional accountant or tax adviser involves costs, and you might think you can eliminate this expense by managing all the financial tasks on your own, correct?
But is DIY accounting the most sensible option for your business? And why might partnering with an experienced accountant be a valuable investment in your future?
The 5 big challenges of managing your own accounts
In the early phases of starting your business, you might believe that issuing some invoices, settling a few supplier payments, and ensuring there is cash available in the bank are tasks you can handle with ease.
However, as the business grows, and you take on more customers and employees, your finances are likely to get far more complicated – not to mention far more time-consuming. So, should you still be managing your accounts solo at this important stage of your growth?
Here are five of the common challenges of going down the DIY accounting route:
The knowledge gap – understanding the intricate details of accounting principles and tax regulations is challenging. Attempting to manage these financial complexities without proper knowledge and experience significantly raises the likelihood of mistakes, overlooked deductions, inadequate record-keeping, and non-compliance with New Zealand tax legislation.
The drain on your time – Handling bookkeeping, payroll, day-to-day accounting and tax filings consumes a significant portion of your week. Recent statistics indicate that many small business owners spend an average of 6 hours and 19 minutes per week on financial administration. When a substantial part of your week is devoted to these tasks, it takes valuable time away from growing your business. As an ambitious business owner, your focus should be on business development and strategic activities that drive growth, rather than managing the books.
Staying up to date with regulations – Tax legislation and accounting standards are subject to frequent changes. If you're not keeping up with the latest regulatory updates, you risk failing to fulfil your compliance obligations. Additionally, you may overlook new government incentives, grants and tax concessions – valuable financial benefits that could help fund the next phase of your business's expansion.
Worry over a company audit – Being audited by an external auditor can be a source of stress. Depending on your business's situation, you might need to adhere to regular auditing regulations. However, without an accountant, your record-keeping might be disorganized, complicating the process and making it more time-consuming and disruptive.
A lack of strategic insight – If you’ve never run a business before, it’s likely you’ll lack the awareness of how good financial management drives your strategic insight. The better your accounts, the higher the quality of your finance data, reporting and management information. And this data and reporting can be a goldmine of information when making big strategic decisions, setting budgets and forecasting cashflow etc.
How working with an accountant turns these challenges into business benefits
Managing your business finances entirely on your own can significantly consume your time as an owner and leader. Fortunately, collaborating with an accountant can swiftly alleviate this burden, allowing you to refocus on your business.
By engaging an accountant to take on your financial management, you get:
The knowledge of an experienced finance professional – when you hire an accountant, you add a financial expert to your team. They'll help you navigate the complexity of accounting, will keep your records accurate and ensure you meet your Inland Revenue (IRD) obligations. This minimises errors and maximises your deductions.
More time to focus on the business – by entrusting your bookkeeping, payroll, accounting, and tax filings to an accountant, you gain precious time. This allows you to spend more of your day engaging with customers, crafting growth strategies, and nurturing relationships with clients, partners, lenders, and investors.
Stay ahead of the regulatory curve – a professional accountant keeps up to date with planned legislative and regulatory changes and will ensure you continue to meet your compliance obligations. They will also be aware of any new government tax concessions, grants or funding opportunities that could provide additional financial support for your business growth plans.
Peace of mind when it comes to an audit – with an accountant managing your accounts, you can rest assured that you have the best possible record-keeping, reporting and financial compliance. This is a major bonus when you face an external audit process. Your accountant can even represent you during the audit process, cutting down the potential stress and keeping you focused on running the business.
Professional strategic advice – accountants offer much more than mere number-crunching. They collaborate with you to examine your financial information, oversee cash flow, recognise patterns and trends, and deliver essential insights for your decision-making process. An accountant is an integral member of your management and strategic team, assisting in enhancing the success, efficiency, and profitability of your business.
Talk to us about outsourcing your financial management
Investing in a skilled accountant is undoubtedly more beneficial for your business than choosing to handle accounting tasks yourself. Rather than getting overwhelmed with bookkeeping or frustrated with record-keeping, entrust the financial management responsibilities to the professionals.
We’re here to lighten the load, sort out your accounts and put you back in complete control of your finances and strategic decision-making.
Get in touch to discuss taking on your accounting tasks.
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