SPEND MONEY
Accurate Bookkeeping
Doing your own bookkeeping to save money? Here’s why that logic often backfires — and what to do instead.
Why DIY Bookkeeping Often Costs More Than It Saves
At this stage, a lot of business owners are still doing their own bookkeeping to save money. I understand why — but it’s worth being honest about the real cost.
The most common scenario I see is someone who can use Xero (note: there’s a big difference between being able to use Xero and using it well) doing the bookkeeping themselves and making errors along the way. Incorrect expense coding, GST mistakes, Balance Sheet misclassifications — these things quietly build up.
Then year-end arrives, and the accounting bill is two or three times what it would normally be because of all the time required to fix the errors first.
There’s also the GST issue. Claiming GST on expenses that don’t include it can result in a large repayment to IRD when an accountant picks it up at year end. That’s an unexpected hit to cash flow that could have been avoided.
I know money is tight at this stage, and I know there’s resistance to spending it on something that feels like it’s already being handled. But consider what you’d do with the time you get back. If you’re deliberate about redirecting that time into the business, outsourcing bookkeeping will pay for itself.