subject: Do it Yourself Bookkeeping is Perilous For the Untrained Bookkeeper [print this page] Do it Yourself Bookkeeping is Perilous For the Untrained Bookkeeper
As a business owner, you may decide not to use a bookkeeping service or elect not to use a Quickbooks Proadvisor Team, or in-house accounting department. It may seem that you have saved money by having a family member do the company's books and pay the taxes to the government as they come due.
However, it must kept in mind that when capital is needed and your company tries to obtain a loan, banks insist on detailed financial records. This is frequently when problems arise. If one does not have electronic records or financial statements have not been accurately prepared, the bank is more likely to lose faith in the applicant's claims of solvency and deny the company credit.
The Internal Revenue Service conducts audits. Small Business owners who are not using software such as Quickbooks have a harder time defending their deductions as computerized records are not available. Misclassified transactions on tax returns result in deductions being forfeited, and back taxes being owed. This can ruin a good credit rating, and possibly result in hardships which could easily have been prevented by a qualified bookkeeper managing the account.
Outsourced bookkeeping is a cost effective solution in many cases. Transactions are properly categorized. Relationships are not put under strain by having spouses doing the bookkeeping. Money is saved as vendors tend to be 30 percent less expensive than an in house bookkeeper who is paid benefits as well as a salary.
Outsourcing to a qualified accounting professional provides peace of mind, as that professional will be there to prepare for any audits. Transactions under scrutiny are explained to the government. Professional advice is dispensed to provide for better bookkeeping, in a manner that is cost effective and in accordance with accounting principals and standards.
