Can I do my own business accounting?
Inked by Blinc
May 1, 2024
You see it time and time again, founders who wear all the hats in the company, including the one of corporate compliance and accounting. Of course we’re biased as our platform, Blinc, takes care of total corporate compliance-in-a-click. However, we want to give both sides a chance and help founders understand the benefits of doing it yourself.
So, here are 5 reasons why founders choose to take on this task and why it might be worth reflecting on this strategy:
Why they do it: The most obvious reason to handle your accounting is to save money. For startups and small businesses, minimizing expenses is crucial, and professional accounting fees can seem like an avoidable cost. With the democratization of knowledge and ease of access, a few YouTube videos about “Accounting 101” and you’re off to a good start.
Think twice: What seems cheap can often become costly. Our CPAs ensure that not only are we preventing costly errors, potentially saving you audit fees, penalties or interest, but we may identify potential tax savings that far outweigh the price you pay for the platform.
Real-world example: A current Blinc user decided to save on accounting costs by handling their bookkeeping, corporate taxes and HST return internally, only to miss several key expense deductions and allocation of expenses which could have saved them close to $2,700 in taxes paid. What seemed obvious to us was not obvious to them. They ended up registering on Blinc 2 months later!
Why they do it: Many founders want a hands-on approach to their finances, believing that by doing the accounting themselves, it gives them a better understanding and control over their financial position.
Think Twice: While understanding your business’s finances is crucial, misinterpreting accounting rules and tax laws can lead to consequences, such as audits, penalties or interest on amount owing. Blinc’s Financial Reports provides the crucial information that founders need and we remove the fluff charts so you can make sense of it all, including sales, expenses, top 5 expenses, taxes paid and cash balance.
Real-world example: A current Blinc user wanted to have control of their finances because they knew the importance of it, but after going through Quickbooks, they quickly realized that understanding the financials was another issue. The fancy charts, year-over-year comparisons, bank reconciliations, fancy names for reports, all didn’t add up. Blinc’s Financial Reports changed all that. Simple and clear numbers, only the information you need to know for your small business to understand it better!
Why they do it: Many founders, and when we say many, we mean it... believe their financials are simple enough to not require professional help, especially if they have straightforward transactions and no employees. This is the true “DIY” mentality with anything in life, fixing your house, your car or your corporate compliance tasks.
Think Twice: Even seemingly simple accounting and tax situations can have nuances that are easily overlooked by the untrained eye, leading to errors that trigger audits, penalties and interest on amount owing. There are other corporate administrative aspects that need to be completed too which many founders completely miss, until they realize it’s too late. The Blinc platform makes compliance-in-a-click a reality when it comes to completing all these pesky tasks.
Real-world example: A current Blinc user had only 2 invoices and 3 expenses, nothing more… this ended up costing them $1,700 in taxes owing. A Blinc CPA helped them dig deeper and found ways to bring that number closer to $17! When they registered on the platform, they noticed there were other aspects of the corporation they completely missed such as the annual return. After onboarding, they completed all the outstanding tasks within 20 minutes, allowing them to breathe better knowing that they were now finally compliant!
Why they do it: Founders have successfully filed their own taxes before, they might feel confident enough to continue doing so without considering the changing complexities of accounting or tax laws.
Think Twice: Past success does not guarantee future accuracy, especially as a business grows and tax laws change. What worked one year might not be applicable the next. Most importantly, “we do not know what we do not know”.
Real-world example: A current Blinc user did their accounting and taxes for 5 years before registering on the platform. Now their business grew over 2,000% in 5 years, which started to bring on additional challenges when it came to share ownership, employees, HST, and more. He needed a platform where all his compliance tasks could be done easily, even though he was growing so fast. Blinc ended up becoming his go-to choice, allowing him to free up a ton of time and have peace of mind knowing the corporation remains compliant.
Why they do it: With the rise of sophisticated tax software, many founders feel empowered to handle their accounting and taxes themselves, trusting technology to guide them through the process.
Think Twice: Software can help, but it’s only as good as the information entered into it. Misunderstood numbers can still lead to incorrect filings. It’s very common to receive financial statements that founders are confident they did right with other platforms, only to find out we have to clean it up from scratch. Blinc can ensure that you are set up in the right way from the beginning so you won’t have to scratch your head and figure it out alone.
Real-world example: A founder was an avid user of Quickbooks for accounting and instantly connected his bank account directly to the platform to extract all the transactions. Little did he know, Quickbooks did not automatically allocate the expenses correctly and included all his personal transactions too. He felt confident the financials were ready, only for a Blinc CPA to find mistakes that could have cost him $6,600 in taxes!
Handling your own corporate compliance can be tempting, but the risks often overshadow the perceived benefits. By engaging with a professional platform such as Blinc, powered by CPAs in the background, you not only ensure total compliance and optimize your returns but also free up your most valuable resource—time—to focus on growing your business and building your dreams.
As always, it’s about working smarter, not harder.
