Why Processing Business Transactions By Yourself Is A Bad Idea
Are you looking for ways to save resources while operating your business? Is managing your accounts and processing your own transactions something you’re considering? If it is, we strongly suggest that you reconsider, and consult with a certified bookkeeper instead.
While there is ample information on the internet about handling small business accounts, unless you are a trained professional with relevant experience, processing transactions is not an easy task. Each transaction needs to be treated differently to deduce the correct results, or else you could experience challenges while preparing your accounts and filing your tax returns.
To show you what challenges you may face with the DIY or do-it-yourself approach, Infinite Accounting Solutions, has explained why processing business transactions by yourself is a bad idea. Keep reading to see where you could go wrong, and how you can avoid unnecessary stress and issues.
1. Incorrect entries
One of the primary challenges of processing business transactions by yourself is not understanding the implications of entering transactions incorrectly. If you don’t have the relevant knowledge of how entering a transaction can affect your financials, you could be entering the transactions inappropriately, which will over or understate your financial statements.
2. Miscategorized transactions
This is another discrepancy that may occur when processing transactions. Unfortunately, if this mistake happens, you may not be aware of how to make corrections or even if corrections are required until it is pointed out to you. Some examples of miscategorized transactions include recording payments to yourself as an expense or transfers as income.
3. Rectifying errors and the imposition of penalties
When you process business transactions incorrectly, they affect your financial statements and, in turn, your tax return statements. If the CRA (Canada Revenue Agency) notices inconsistencies in your returns, they will launch an investigation of your business accounts. During the investigation, if they see incorrect information recorded, they could hold you for tampering of information and charge you a hefty penalty. Similarly, if you are allowed to rectify your accounts, you need to pay a professional to reprocess all of your transactions and then file your accounts again.
Do things right - Hire a professional
The best way to avoid these challenges is to enlist the services of a certified bookkeeper and give them complete access to your expense and income details. These experts have the knowledge and skills to process your accounting information efficiently. They also use accounting software to speed up the process and secure your information online.
Moreover, with a professional that has an accounting background and accounting software expertise, you will be able to translate your income and expenditure information into your accounting program. They will also make sure you’re using methods that align with CRA standards.
If you’re wondering how much a professional will charge to do all of this, do not fret! Most bookkeeping rates vary depending on the experience and bookkeeping services provided. At Infinite Accounting Solutions, we charge our clients based on their requirements and budgets. As a renowned bookkeeping firm located in Langley, British Columbia, we also ensure our clients complete honesty, integrity, and privacy while handling their accounts. At the same time, we offer them quick and accurate services to avoid trouble with the law and unnecessary expenses.
To learn more about our services, please click here or get in touch with our bookkeeping experts by clicking here.