Articles of Interest

I Have QuickBooks and Don’t Need A Bookkeeper

By Andy Carnaghe on Jul 27, 2020 in Articles of Interest

“Who needs a bookkeeper when you have that easy-to-use; do-everything, no-brainer business bookkeeping software programs?”

I must tip my hat to the software marketers! They have done a phenomenal job of selling the idea that you don’t need to know anything about accounting to do accounting.

Well, to a degree, they are correct. But, because the life blood of a business, its management information, flows through the accounting system don’t be so sure that saving money by not having a properly qualified bookkeeper is actually saving you money.

There are some inherent limitations in the off-the-shelf one-size-fits-all small business accounting software packages. QuickBooks users are generally not stumped by the software; they are stumped by the accounting information necessary to complete the transactions. Quick access to correct information is essential to maintain the accuracy of your financial records.

An accounting software package cannot tell you how to categorize all of your business transactions, and if you do not categorize your business transactions correctly you may not be using the correct financial information to make business decisions.

Routine entries are easy with accounting software, but to understand where your business transaction should be posted takes a person with a good accounting background.

For example, trading in a depreciated piece of equipment for new equipment creates some very special book entries.

Another Example: Do you know how assets, liabilities, equity and other accounting items interact and affect your operating results?

If these are not corrected, your CPA will need to research and correct the problems in order to prepare your tax returns, this can be costly!

As a business owner where is your time best spent? If you are able to generate sales of several hundred dollars an hour in your business, does it make sense that your time is spent fooling with accounting software?  Probably not.

What do you generate for the business compared to what you might pay a qualified bookkeeper? Be careful not to be penny-wise and pound foolish.

If your banker, CPA, attorney, or worse yet, IRS auditor asks about your accounting records will you have the correct answers? And, will you have those answers in a timely fashion? If you’re paying your CPA $150 an hour to clean up bookkeeping you’re losing in a big way.

The bottom line - be sure that you invest your resources in the areas that will give you the best return on your investment. When it comes to spending money on your books, don’t skimp. If you try and cut costs and make price point your main objective instead of quality and service, changes are you are spending too much money!!