DIY/Budget Bookkeeping vs. a CPA for Small Businesses

Many small business owners are bootstrapping their operations, and being the industrious individuals they are, they look at DIY Bookkeeping as the solution towards their accounting and recordkeeping. In the short-term, this feels cheaper, but as the business scales, small business owners pay in other ways: They may spend large amounts of time with their accounting that could be used for scaling the business (or well-earned rest), and mistakes in the books can cost them dearly when it comes time for tax prep. 

The math is as simple as, if your business earns you $75 an hour, and your books are taking you 10 hours a month, that is $750 in opportunity cost. If your books get messy, requiring cleanup, or need to be caught up, and your CPA charges $250 an hour, a generous rate for business return preparers, even 3 hours of their time on such a task amounts to $750 that was spent unnecessarily. Moreover, they have less time in their budget to actually add value in doing your business tax return, and the true unmeasurables are what could be missed in terms of advantageous tax strategy.

Let's break down the bookkeeping process, because many believe it is a simple transactional process (a common misconception, even amongst certain bookkeepers). You need to learn Quickbooks (or some similar software), understand transaction categorization, account reconciliation, know how to identify and correct errors, understand tax treatment, research accounting guidance, and so forth. The risk comes with misclassified expenses, and therefore missed deductions, sales tax errors, and incorrect financials, which can be important for getting a loan or investment. When tax time comes, it's a garbage in-garbage out scenario.

Let's also discuss budget bookkeeping services. Many small business owners will target low price offerings as they move on from DIY bookkeeping. Budget bookkeepers are going to be very focused on the transactional data entry that comes with the practice, and because they operate on providing a low cost, they will focus on volume. Because they focus on volume, your business becomes a box to check. If AI-only services are in the mix, you're often dealing with a lower caliber of service. Frankly, AI has been revolutionary for a lot of areas, but it's just not there yet for bookkeeping and accounting. Ultimately, a budget bookkeeper will give you budget services, will not know how to advise you on your financials, may not have a true accounting background, and like a budget insurance policy, can cost you more in the long run. As a CPA myself, I know the bane of a business tax preparer's life can oftentimes be a bookkeeper who doesn't truly know accounting. 

What can a CPA, like Reustle Accounting and Finance Solutions, do for your business? As a CPA, I have a background in understanding more than the transactional nature of bookkeeping. The services I offer will give you a clean set of books that are tax-ready, I can provide insights into the financial health of your business, and because I am a CPA, I will make sure to uphold the standards set by the license and provide the best quality service. To sum it up, with Reustle Accounting and Finance Solutions, you can expect fewer errors, tax-aware categorization, monthly reconciliations, financial reporting, proactive guidance, and cleaner books. We are a partner in your business growth, not just a data entry firm.

To all Philadelphia Area small business owners: Contact Us to set up a consultation and take the stress off of your business operations.