According to surveys, more than half of all business owners admit that bookkeeping is their least favorite task. In reality, no one starts a business to become a bookkeeper; it is time-consuming and rather daunting, and mistakes can be costly. No matter how begrudging a task bookkeeping is, it is a necessary part of a successful company’s infrastructure.
Selecting the right option for your organization can be difficult. There are tons of software solutions and accounting firms to choose from, and you could do a bookkeeping course. However, what works best for your businessmay not work for someone else’s. Before you can decide where to begin, you need to determine which method is best for your firm.
When it comes to bookkeeping frameworks, any bookkeeping course will teach you that there are three main options, orthe “Bookkeeping Trinity.” Let’s take a closer look at each option, how they work, and what they could mean for your business.
Accounting Firms – The Traditional Method
Hiring an accounting firm or individual accountant is the most traditional bookkeeping method. They offer significant benefits over trying to make heads or tails of your books yourself. In fact, you’ll barely have to lift a finger, and you’ll be given a little expert insight, too.
There are a few drawbacks to this method, including slow turnaround times and higher fees. Many places charge high hourly rates for consultations, and that makes it tricky to set a steady course for your monthly budget. With this method, as a business owner you will have to consider whether to hire an in-house bookkeeper, outsource to an external accounting firm or take a bookkeeping course so you can keep track of your finances yourself. An in-house accountant can be a reliable option if you have a larger business. However, smaller companies may find that the costs usually outweigh the rewards.
DIY Software – A Semi-Traditional Method
DIY software has become an attractive option that offers business owners a fantastic interface with which to monitor their finances. Several top companies provide robust software to help facilitate advanced bookkeeping functions. Not only are a significant number of these tools helpful, but they can also help you save money when it comes to employing the services of a traditional accountant.
While this is a favorable option for accountants, it may not be ideal for business owners. Having a great piece of software doesn’t make you an expert in tax codes or government regulation. Business owners may miss out on deductions, which would disqualify them as a compliant business, and they could find themselves facing audits for improper tax filing. A straightforward bookkeeping course is no auxiliary for the extensive knowledge an accountant brings to the table, but it can certainly help you to understand your business functions better.
Software as a Service – The Fully Automated Method
The final option in the Trinity is software as a service option. It is a hybrid option that provides the best of both worlds, giving you, the business owner, access to customized software and a dedicated bookkeeper. Rather than having to reconcile your own transactions, the bookkeeper will do it for you. Some services even offer unlimited consultations at no hourly cost. Instead, they go with the most modern model of a flat-rate monthly fee. Business owners can enjoy the comfort of knowing they can reach out for advice without having to pay a fortune, and they can make more accurate budget predictions each month.
While this option will not suit everyone, such as large and somewhat complicated corporations or large accounting firms, for the majority of small business owners, this bookkeeping framework is arguably the most cost-effective and inclusive. It offers all the benefits of the other two methods without any of the negative points. A hybrid mixture of technology and the human element of a bookkeeper can dramatically reduce the headache of entering data and navigating tax law, while still providing a high-tech solution.
No matter which solution you feel best fits your company, it’s always a good idea to have at least a little bookkeeping know-how so you can keep track of your finances.