Small Businesses Are Leaving DIY Accounting Solutions in the Past. Here’s Why

Published by BradyRenner CPAs | April 11, 2022

As businesses grow, it’s inevitable that business owners will need more in-depth financial advice and support. Financial regulations and audits require meticulous accounting skills to ensure businesses stay compliant. This means investing in a comprehensive business accounting solution that monitors your company’s financial health, providing detailed information about its assets, liabilities, transactions, and tax considerations. DIY accounting software like QuickBooks can be a cost-effective way to approach your business finances, but without expert help, you might not be getting the most out of these solutions.
Because there are numerous complexities to business accounting, a growing number of business owners are combining DIY accounting software with assistance from a qualified CPA. Let’s explore why your business should move beyond the benefits of managing your own QuickBooks software to get even more out of your business accounting solution.

Reduce the Time Spent Dealing with Finances

One of the core reasons businesses become frustrated with in-house accounting software like QuickBooks is that it becomes a time-sink when they’re doing everything themselves. Learning how to get the most out of this type of financial software can be labor-intensive, and unless you spend the time getting to know the ins and outs of the software, you could be missing out on many of the benefits. Many businesses now rely on a CPA or outsourced accounting team to manage their QuickBooks or other DIY accounting software simply because it allows them to get back to what they’re truly passionate about: running their business.
The learning curve for any accounting software can be steep for beginners. Unless your business is based in finance or connected to the finance industry, you may struggle with some accounting terms. You need to spend time learning how to use the software to avoid inadvertently allowing errors to creep into your accounts. Errors can lead to problems with the IRS — an issue that nobody wants to have to deal with. There’s also the time taken to understand the various business recordkeeping tasks, necessary accounting functions, and relevant business tax laws and guidelines for companies in your industry.
Time is a valuable commodity in business, and the more time you spend managing your money, the less time you spend making it.

Potential Audit Issues

Documentation, transparency, and clarity are key in business accounting. These elements ensure that you’re well-prepared should an audit be necessary. But what happens when the audit trail is compromised? Unfortunately, this is possible with DIY accounting software, even reputable ones like QuickBooks.
Users can make manual entries in the software without audit trail oversight, which can cause inaccuracies that turn into major accounting errors. If inventory numbers are entered inaccurately, it can impact sales fulfillment and cause the business to order an incorrect amount of new stock, parts, or other elements linked to proper inventory management. From in-house problems to audit failure, flawed data due to human error is a real possibility without a financial expert to manage your accounts.

Dealing with Fluid Financial Laws and Guidelines

Laws governing taxes, businesses, and various industries aren’t static. Legislative changes at local, state, and federal levels may impact your business at any time of year. Do you know all the goods and services on which Maryland currently requires businesses to pay sales and use taxes? How did you handle the state’s tax-free week in the summer? Financial experts keep themselves and their team up to date with any changes in financial laws and know which ones are relevant to your industry. With that in mind, they can make sure you’re not missing out on tax breaks or other benefits and keep your costs to a minimum. This is an edge that can’t be overstated in ever-more cramped and competitive markets.
Software Upgrades and IT Support
Many SaaS (software as a service) or FaaS (function as a service) offerings come with a subscription charge and may require more money for upgrades or a more customized offering. As your business expands, you’ll probably find that the lowest price point for any DIY accounting software isn’t sufficient for your accounting needs. You end up having to factor the increasing cost of software into your budget.
You also need to account for any technical support you may need. SaaS providers like QuickBooks manage their own IT support and shouldn’t cause you too many issues. However, suppose you’re managing your accounts via your own spreadsheets and databases. In that case, you may be susceptible to data loss if you have a power failure or even issues with software compatibility as systems get upgraded. Managing your accounts also means supplying your own data security to protect your sensitive financial information and data about your customers or clients. A qualified CPA can provide the right advice on financial data security regulations to ensure business compliance.

Benefits of an Outsourced CPA or CFO

DIY accounting software, like any SaaS, has its limitations. Working with an actual human who has multiple qualifications in finance goes so far beyond getting the books done. The benefits of consulting with a CPA include:
Financial forecasting support
Highly accurate accounts reconciliation
Real-time responsiveness to your company’s evolving needs
Customizable, versatile solutions
Strategic financial management
Enhanced financial visibility
Built-in scalability
Your CPA or CFO won’t tell you to ditch the accounting software; they’ll help you make the most of it and so much more besides.
Working with a financial partner like BradyRenner helps avoid the many problems that arise from data input errors. Even when human error occurs, periodic reviews by your BradyRenner CPA can catch discrepancies. Then, we apply our expertise to track down the error, reconcile the data, and correct the mistake before it becomes a problem.
Using professional accounting and financial services eliminates scaling problems and unexpected upgrade costs. With our built-in security safeguards, data backup solutions, and a team of professionals, tech issues are no longer something you need to worry about. We keep abreast of any legislative changes that may impact your business and apply solutions accordingly. We also offer strategic financial management to help you plan for your company’s future.
Consult with a BradyRenner CPA to learn more about our services and how we can help manage your finances as your business grows.