Businesses are always looking for ways to stay cost-efficient in their daily operations. Such measures may include consolidating tasks, which lessens the need to hire additional manpower or consultants. For small businesses in particular, this often manifests in do-it-yourself (DIY) accounting—meaning that, rather than by an accountant, accounting tasks are instead done by the business owner or their staff even if they’re not necessarily trained for the job.

While DIY accounting may initially appear to be the more cost-saving option over hiring a dedicated accountant, it can also potentially lead to costly mistakes, inefficiencies, and missed opportunities in the long run. If you’re based in the Otago area in New Zealand, hiring professional accountants Dunedin businesses highly recommend may be the better way to go, both for your coffers and your overall business efficiency. 

Here are some key reasons as to why hiring an accountant will likely prove to be the more cost-effective choice over DIY accounting: 

1) You Will Be Able to Minimise Costly Errors

Accounting errors such as inaccurate tax filings, forgotten invoices, or miscalculated deductions are sure to have a serious impact on your business’s finances. These mistakes may also lead to penalties, audits, or even legal disputes, which will take precious time and resources to resolve. If your business’s accounting isn’t done by trained accountants, then you’re more likely to encounter these errors and thus end up incurring more costs in the long term.

In contrast, if you entrust your accounting needs to professionals, you’ll get peace of mind knowing that experts are handling the complex financial concerns of your business. Their attention to detail will also ensure that your financial records are accurate, thus helping you avoid unnecessary costs and stress.

2) You’ll Be Able to Save Time and Increase Your Business Productivity

Managing accounting tasks alongside other responsibilities can be immensely time-consuming for you, especially if you don’t have a financial background to begin with. You’ll likely just end up losing time that could’ve been better used to focus on growing your business or attending to other matters instead.

Hiring an accountant will allow you to delegate those duties to a professional, freeing you up to concentrate on other aspects of your business that may need more of your attention. This will then allow you to be more productive, which in turn can lead to increased revenue and offset the costs of hiring an expert.

3) Your Accountant Will Help You Maximise Your Tax Deductions and Credits

DIY accounting often operates on just basic knowledge of tax laws. This limited understanding can result in missed opportunities when it comes to maximising all allowable tax benefits and reducing your taxable income. 

Accountants, however, are well-versed in tax codes and regulations, allowing them to identify deductions and credits that you may not even know exist. This expertise can save you money in the long run, particularly during tax season, as it can mean the difference between a significant tax refund and overpaying your dues.

4) You’ll Get Expert Financial Advice from Your Accountant

An accountant can do more than simply maintain your books. They can also impart financial advice towards increasing your business profitability and long-term savings. 

For example, your accountant might be able to point out areas where you can cut costs or suggest opportunities that you can pursue to increase business revenue. Whether it’s about managing cash flow, planning for expansion, or optimising your investments, you can rely on your accountant’s insights to make more informed decisions and steer your business toward greater success.

5) You Can Improve Your Compliance with Evolving Regulations

It can be extremely challenging for people with no specialised financial knowledge to keep up with changes in tax laws and financial regulations. You won’t have an easy time ensuring that your DIY accounting practices are compliant to them. 

But upon hiring an accountant, you can count on someone to keep track of any tax law or regulation changes for you and thus guarantee that your finances meet the current legal standards. Their expertise will save you from fines or other financial repercussions associated with non-compliance.

6) Your Accountant Will Help Scale Financial Management as You Grow

As your business expands, managing it will become increasingly complex as well. While small businesses may get away with DIY accounting at the early stages of their operations, there will come a time when the expertise of a professional will be needed to efficiently handle the enterprise’s growing accounting needs. 

An accountant will be able to offer tailored and scalable solutions to managing your business’s accounting needs at various stages of its growth, ensuring that your finances are in good working order even as you start taking on more transactions or multiple revenue streams.

7) You’ll Get Access to Professional Tools and Systems for Your Business Finances

Professional accountants often use top-of-the-line tools and software that to make accounting tasks much more efficient and accurate. You do have the option to acquire these tools on your own, but they will likely be expensive both to buy and to onboard. Doing so may also take away previous business capital that could be put to use elsewhere. 

Modern-day accountants already have access to these tools and will know how to use them to the best of their abilities. That means that hiring an accountant will allow you to leverage their resources without the expense of purchasing and learning to use accounting, bookkeeping, and financial management software yourself. These tools also promise faster and more reliable results compared to your manual efforts, allowing for quicker turnaround of important financial documents.

Again, while it may be tempting to handle your finances independently, the hidden costs of DIY accounting often outweigh the perceived savings. It would be a good idea to invest in hiring an accountant early on rather than mitigate any potential losses. With added benefits such as expert financial advice and tailored solutions to match your business’s needs, you’ll be able to enhance your current operations and, overall, promote faster growth for your business.