How to best keep your books yourself.
For most folks just starting out, we do not recommend setting up professional accounting software if you’re not ready to hire out your bookkeeping. There are a lot of options instead of hiring a bookkeeper, that won’t lead to messy finances or tax season angst.
And even if you’re further along in your business journey, tiny solo service businesses often don’t have the revenue or the need for professional bookkeeping services.
If you’re not hiring a professional bookkeeper, then you may find yourself doing one of two things:
- Avoiding your financials entirely, until around tax time when over an intense three days you dive into confusing bank statements, panicking, to get your accountant everything they need.
- Sign up for complex accounting software like Quickbooks or Xero, attempt to do it yourself; get completely confused and flustered, abandon this software, while still paying for the subscription.
More than avoiding financials entirely, the biggest mistake I see if from folks starting out is setting up Quickbooks or Xero before they’re ready to hire a professional.
Here’s why:
- These platforms need to be customized to your business. The out of the box Chart of Accounts does not work for anyone!
- Because these platforms facilitate complex accounting principals, it’s easy to get overwhelmed and give up. You probably will make mistakes, which compounded over time, can be very challenging to untangle.
- While it might seem like a matter of learning software, to do your own books you’ll need to learn accounting principles at the same time.
