Are you a startup owner or a small business owner looking to streamline your finances and accounting processes? Then you must have come across the debate between DIY vs Outsourcing accounting with software. While DIY or Do-It-Yourself accounting refers to managing your own books with the help of accounting software, outsourced accounting refers to hiring an external accounting firm for the same purpose. In this blog, we’ll explore the pros and cons of both approaches to help you make an informed decision.

Pros of DIY Accounting 🛠️

Cost-effectiveness 💰

The most significant advantage of DIY accounting is that it can be cost-effective, especially if your business is small or just starting. Accounting software tends to be affordable and may even offer a free trial. Plus, you don’t have to worry about paying external accountants, which can save you a lot of money in the long run.

Control over Finances 🤑

As a business owner, you might want to have complete control over your finances and accounting procedures. By doing your accounting yourself, you can keep a close eye on your finances and make decisions based on real-time data.

Flexibility 🌀

DIY accounting provides you with the flexibility to manage your finances at your own pace. You can choose when to update your books, which metrics to track, and how much detail to add to your reports. You also have the flexibility to choose which accounting software suits your business needs best.

Silhouette of a businessman holding a calculator

Cons of DIY Accounting 🤔

Time-consuming 🕑

DIY accounting can be challenging, especially if you lack accounting knowledge. You might end up spending more time than anticipated trying to figure out how to use the software and manage your finances. This can take away valuable time from your core business activities, ultimately slowing down your progress.

Lack of Expertise 🤯

DIY accounting can be a daunting task if you lack expertise in accounting. You might end up making errors, which could cost you more money in the long run. Additionally, without proper bookkeeping, you might not have access to the insights that can help you make informed decisions.

Increased Risk 🔥

DIY accounting can potentially increase the risk of financial fraud, errors, and misreporting. Furthermore, if you are not familiar with the laws and regulations governing accounting practices, you can easily find yourself in a difficult situation.

Picture of a confused person surrounded by multiple accounting books and charts

Pros of Outsourced Accounting with Software 👨‍💼📊

Expertise and Professionalism 🎓

Outsourcing your accounting to a professional accounting firm ensures that your books are always up to date and accurate. Hiring external accountants means that you are working with professionals who have expertise in accounting, always allowing you to make informed decisions based on real-time data.

Time-Saving ⏰

Outsourcing your accounting can save you time and allow you to focus on your core business activities. You can delegate your accounting procedures to external professionals, freeing up your time and energy to concentrate on other business tasks.

Reduced Risk 🔐

Outsourced accounting reduces the risk of accounting fraud, errors, and misreporting. Hiring an external accounting firm ensures that your books are compliant with the laws and regulations governing accounting practices.

Picture of a business meeting with an external accountant giving advice

Cons of Outsourced Accounting with Software 🤔

Costly 💸

The primary disadvantage of outsourced accounting is the cost. Hiring professionals can be expensive, especially if your business is just starting, and you don’t have a lot of cash reserves.

Lack of Control 🤝

Outsourcing your accounting may result in a lack of control over your finances. Handing over your accounting procedures means that you might have less say in how your books are managed, and you might not have immediate access to financial data.

Less Flexibility 📉

Outsourced accounting often means that you have less flexibility with regards to your accounting procedures. You might have to work with an accounting firm that uses a specific system or software, and you might not have the option to customize your reports as you would like.

Picture of a person standing at a crossroad, trying to decide between DIY and Outsourced accounting procedures

Conclusion 🎉

In conclusion, both DIY accounting and outsourced accounting with software have their pros and cons. The choice between the two depends on your business’s size, budget, core competencies, and the level of control you want over your finances. It’s essential to weigh each approach’s benefits and drawbacks before making a sound decision.

Remember, nothing is final, and you can always change your approach as your business grows. Always review your accounting methods regularly, and re-evaluate your approach to ensure that you are making informed decisions.

Picture of people happily discussing accounting procedures, thrilled with the solution they found