Accounting is often seen as one of those tasks you can handle yourself as a business owner. After all, who better to manage your finances than you? But DIY accounting can quickly turn into a minefield, especially as your business grows.
Knowing when DIY accounting is no longer cutting it can make all the difference between your business thriving and merely surviving.
In this blog post, we’ll explore the common pitfalls of DIY accounting and highlight the tell-tale signs that it’s time to call in the professionals.
Common Pitfalls of DIY Accounting
1. Errors and Inaccuracies
One of the most common issues with DIY accounting is human error. A missed zero, incorrect categorisation, or overlooked deduction can cause major problems.
In fact, UK small and medium-sized enterprises (SMEs) lose £22,000 a year on average due to late payments, leading to 50,000 business closures per year.
Administrative errors can lead to tax miscalculations, missed filing deadlines, and ultimately fines from HMRC. While software tools can help, they aren't foolproof without proper accounting knowledge.
2. Time-Consuming Tasks
Managing your business’s finances takes time—time that could be better spent growing your business.
According to a Sage study, UK small business owners spend an average of 71 days a year on administrative tasks, with accounting being a significant portion.
This time sink impacts productivity, leaving less room for strategic planning or customer acquisition.
3. Tax Complexity
The UK tax system is complex, with frequent changes to regulations and deadlines. Thus, keeping up with VAT rules, corporation tax, and allowable expenses can be overwhelming.
Research shows nearly one in 12 SMEs—around 440,000 firms—admitted to missing tax payment deadlines in the past year, with a third of them missing five or more.
When to Seek Professional Help
While DIY accounting might suffice in the early stages, there are clear signs that it’s time to bring in an expert:
Your Business Is Growing
As your business scales, so does your financial complexity. Hiring employees, managing larger volumes of transactions, or expanding your product line requires more detailed financial reporting.
A professional accountant can help ensure your financials remain accurate and compliant, giving you peace of mind.
Tax Season Stress
If tax deadlines give you anxiety or leave you scrambling to get your accounts in order, it’s time to seek professional help.
An accountant can handle your tax filings, optimise your deductions, and ensure you’re compliant with the latest regulations.
You’re Facing an HMRC Audit
Being selected for an audit can be daunting, especially if you’ve managed your accounts solo.
A professional accountant can guide you through the process, making sure everything is in order and minimising potential penalties.
Wrapping Up
While DIY accounting can work in the beginning, the risks often outweigh the benefits as your business grows.
Seeking professional help ensures you’re not only compliant with UK tax regulations but also able to focus on what you do best—running your business.
If you’re spending more time in spreadsheets than on your actual business, it might be time to consider the help of an accountant.
Contact Sanay today to see how we can support your business's financial health and take the stress of accounting off your plate.
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