Why You Should Ditch DIY Accounting
By Paul Johnson
CPA, CGMA, MBA
When we started Atlasphere Consulting this summer, many of the initial conversations we had with potential clients involved a common question. The recurring question was “why shouldn’t I just buy ________ (insert any of a number of off the shelf accounting systems here) and have my _________ (spouse, child, neighbor’s third cousin, or anyone/anything else with opposable thumbs) enter the information for me rather than pay to outsource”? We call this DIY (do-it-yourself) accounting. Well, here’s a brief list of why it makes sense to ditch, or not start, DIY accounting: hand.
Internal Processes – A key function of an accounting role in any organization is to ensure that proper processes are in place to effectively and efficiently capture information related to the businesses transactions. No to mention implementing the appropriate internal controls! Working with experienced accounting professionals can save you lots of time and money in the long run through setting up proper processes and procedures. While it is easiest to establish solid and consistent processes from day one, it is never too late to review and make corrections as your organizations’ needs change.
GIGO (Garbage In, Garbage Out) – Many business decisions are made based on the financial information received out of the accounting system so shouldn’t it be a priority that this is accurate when it goes in? Often when someone is not focused solely on the accounting function there are inconsistencies in the data entered into the system. Well, if the information going into the system isn’t of high quality and consistent, then you’re not going to get quality information out. You want to ensure that accounting transactions are entered consistently on a timely basis to enable accurate and useful reporting.
Focus on your Specialty – Most likely, when you started your business it was for many reasons other than to do accounting! Let’s be honest, accounting was an afterthought that just sucked your energy and time away from doing those things that were revenue producing and you actually enjoyed. Well, why not recapture the time in your days to focus on those things by having someone else do the work for you?
Business Strategy – Business strategy requires consideration of many different factors, one of the most important being financial. While you are focused on the operations and other aspects of your business it is easy to lose sight of the financial position. Outsourcing your accounting can ensure you have someone always with their eyes on your financial picture. Lean on providers who have experience in managing and growing businesses to help you with making strategic business decisions.
Software Costs – If you have purchased software, and maintained this for multiple years, you are familiar with the need to pay for the annual updates that often accompany these applications. This is particularly true if you do payroll in house and need to maintain current payroll tax tables. Outsourcing your accounting removes this burden from you as the providers bear the responsibility of keeping the applications up to date. Personally, I recommend working with a provider who uses cloud-based solutions for their services as these applications are always up to date with the latest software versions and tax tables from the software vendors.
Don’t struggle with DIY accounting any longer…embrace a smarter way by outsourcing!