How do I do the bookkeeping as a small entrepreneur?
If you have decided to start your own business, there is a lot to do. Of course, you have written a business plan or at least a plan in your head. You have to find clients and you have a hundred other things to arrange. One very important element of being an entrepreneur is bookkeeping. It can be easy to forget to take care of this in the rush, but you shouldn’t!
It is very important to take your administration and bookkeeping seriously. It is very important for several reasons. First of all, of course, because it is compulsory to arrange this properly. The tax authorities must be able to check whether you are doing everything properly. The way they can check this is by checking your administration. This is why it is important to ensure that the bookkeeping is done in the way prescribed by law.
Besides these obligations, it is also important for the success of your business that you keep good records. How big or small your company is, doesn’t really matter. By keeping your books in order, you will gain insight into the state of your business. Is it going well or does it need to be adjusted somewhere? You can only really determine these things if you have insight into the correct figures. That is why you must ensure that you have these figures at hand, in your own accounts. That way you avoid surprises. If you update your bookkeeping too late, you may find months later that things are not going as well as you think they are.
Having established that bookkeeping is a serious subject, the question naturally arises: How do I do it? There are many different ways to do bookkeeping. Basically, you have the following options:
- Doing it yourself. You do the bookkeeping yourself, based on your invoices and data. You use a programme for this, or you do your bookkeeping in Excel if it is simple enough. This is the cheapest solution, but also involves risks, such as errors.
- You let someone else do your bookkeeping. This is basically a professional accounting firm, or a bookkeeper. These people work with bookkeeping every day, so there is a good chance that they can take over your administration in a professional manner. The consequence of this choice is, of course, that you will have to pay the accountant a considerable amount of money every month or year. After all, he or she does not provide this service for nothing.
- A combination of the above options. For example, you use an accounting program to which your accountant also has access. You process your data and invoices yourself. Then your accountant will look at the bookkeeping program with you every month or every quarter. In this way, they check your work for errors and can, for example, inform you about new legislation that you can benefit from. In this way, you do not have to pay the full amount for the complete outsourcing of your administration. However, you will reap the benefits of your accountant’s knowledge.
Take a number of things into account when making your choice. If you want to do your bookkeeping all by yourself, make sure you have enough knowledge to do this properly. As an entrepreneur, the tax authorities assume that you know the law. If you, as an entrepreneur, make mistakes in your bookkeeping because you are inexperienced, this is no reason for the tax authorities not to give you a fine. It saves money not to hire a professional, but if you make that choice, make sure it is a wise one. For example, first take a course in bookkeeping if your administration is not complex. Then you may be able to make this choice safely.
Outsourcing your administration completely can be tempting. You agree with an office that they will take care of everything for you and you don’t have to worry about it anymore. But is that wise? As an entrepreneur, it is important to know the figures of your company. If you never deal with bookkeeping, it can cause gaps in your knowledge. After all, you never look at the figures, so you probably don’t know them well either. As a result, you may miss out on valuable information about your business and opportunities to make adjustments.
That is why you could end up doing a combination. You do your own bookkeeping, but you need a professional to check it. Some accountancy firms specialise in this form of cooperation. Bear in mind that you will probably have to use the bookkeeping software that your accountant already uses. It is therefore not wise to already set up your entire administration in a certain software package if you already know that you would like to use an accountancy firm.
The conclusion is that it is very important to make this choice well-considered. Also take into account what is and is not allowed in terms of legislation. If you have any questions, contact an advisor. This may seem expensive and unnecessary, but it can prevent a lot of misery. Because an audit of your accounts may go back several years, one small mistake that recurs very often may be a mistake with very big consequences. Good luck with your business and with setting up your accounting. If you are curious about the experiences of others with a particular accountant or accounting software, read the reviews first.
