5 good reasons to do your own bookkeeping
When you're starting out in business, bookkeeping can seem inaccessible, especially if you're allergic to figures. However, doing your own bookkeeping not only offers many competitive advantages, but has also become very accessible thanks to today's tools, even if you've never done any bookkeeping in your life.
Doing your own bookkeeping doesn't necessarily mean doing without a chartered accountant. In fact, a chartered accountant is compulsory for certain types of business, such as tradespeople. What's more, having a chartered accountant can help you optimise your tax situation and save you a lot of money.
What we are talking about here is doing the "bookkeeping" yourself. This is what represents the history of the flows that have passed through your company. In reality, you probably already do a lot of this data entry work every day to keep track of your customer payments, follow up your invoices or monitor your supplier expenses.
Here are 5 good reasons to do your accounting yourself:
1. You'll save money
An accountancy firm charges for two types of service: advice and data entry. On average, you pay €2 per sales or purchase invoice document entered with your payment. Count up the number of sales and purchases you make each year and you'll get an idea of the cost of data entry.
However, you probably already enter this information in your invoice editor when you invoice your customers. So why pay your accountant to enter this information a second time? The same applies if you are already tracking payments.
Using software that generates your accounts from your day-to-day management will save you the cost of double entry!
2. You'll be able to keep better track of your company's activity
Do you know how much your customers owe you as you read this? How much you owe your suppliers? What is your turnover? Running a business on sight can work, but it creates uncertainty and stress.
But accounting is more than just a legal requirement. It's a real tool for steering your business!
When you do your own bookkeeping, you naturally know your day-to-day figures, so you'll have a clearer picture of what's going on. You'll know quickly whether or not you can make an investment or take a break. This gives you greater control over your expenditure, which in turn helps you to improve your profitability.
3. You'll understand accounting better
There are two ways to learn: start with the theory and then practise applying it in practice, or start with the practice and then deduce the theory. When you're running a business, it's more likely to be the second of these two methods: learning by doing.
But accounting is a collection of complicated words for very concrete and simple concepts that you probably already know.
By doing your own bookkeeping, you will naturally improve your skills over time and without the need for theoretical training. As a result, you'll be increasingly able to understand accounting concepts, and therefore your own management.
The more you understand the meaning of your figures, the easier it will be for you to understand their impact, and therefore to make the right decisions.
4. Your accounts will be up to date all the time
Delegating all your bookkeeping to a third party doesn't give you the same level of responsiveness. How long do you need for your accountant to send you a financial statement? Your accountant will never be able to process your invoices as quickly as you can.
Doing your bookkeeping yourself puts you on a real time footing, quickly and efficiently. You'll be much more responsive. No more stress waiting for documents - you already have them.
5. You'll save time
This light, day-to-day management not only makes you more responsive, it also means you're much better organised.
How much time did you spend putting together the paperwork for your last balance sheet? How many return trips did you make to the accountant for all the missing documents? If you do the data entry yourself, your accounts will be ready for the balance sheet at the end of the tax year.
A high-performance accounting management tool will not only save you time on your accounts all year round, it will also mean saying goodbye to the "tax period". All you have to do is export your data and send it to your accounting firm. Less stress, more peace of mind.
Criteria to take into account when choosing your accounting tool
Doing your own bookkeeping may have been complicated in the past, but tools now exist to simplify the task. They are often automatic, so you don't need to know anything about accounting entries.
To choose the accounting software that best suits your needs, here is a list of steps and criteria to consider.
- List the software that matches the size and sector of your business.
- Determine the monthly budget you want to spend - no software is 100% free, but you can find very affordable deals.
- List the modules you need: estimates, invoices, accounting, dashboard, VAT, etc... and in particular accounting export if you have a chartered accountant.
- Check compatibility with other tools that are essential to your business, and with your bank.
- Find out about the quality and availability of customer service and the documentation available.
- Choose between 100% online software (SaaS mode) or software to be installed on your computer (in the latter case, check mac/PC compatibility).
- Take an interest in multi-user and multi-account functions, depending on the number of people or activities you want to host on the same tool.
Once you've defined your criteria, you can compare the software and choose one or two to test. It's very important to try out software before making your final decision. You will be using your accounting tool very regularly, so you need to be comfortable with it. This will allow you to test the ergonomics, design, customer support, access to options, rendering of your documents, etc.
Good accounting software that meets your needs will allow you to do your own bookkeeping with peace of mind. Say goodbye to costly double entry that's out of touch with reality, and hello to real time, stress-free management. What are you waiting for?
Article translated from French