Doing Your Own Bookkeeping and Taxes

Accounting's not for everyone. Here, owners discuss the pros and cons of managing your own books. February 17, 2006

I am a one man shop, building 8-10 kitchens per year. What are your opinions on using software like “QuickBooks” versus paying an accountant or business advisor? Any information for a new business will be appreciated.

Forum Responses
(Business and Management Forum)
From contributor A:
I'm a control freak and a computer geek, which means that I naturally do my own books using QuickBooks 2005 Pro. It takes a lot of time and energy, not to mention the stress of wondering whether or not you clicked the right button or ran the right report. You have to like doing stuff like this or I think it'll just drive you nuts.

Ask yourself these questions:
1) Am I sufficiently computer literate to learn a sophisticated program well enough (and soon enough) to make it worthwhile?
2) Am I willing to work all day and then spend a substantial number of off hours doing the books?
3) Do I know enough about accounting and taxes to even ask the right questions when I get stuck?
4) Can I afford an outside CPA more than I can afford the time and energy to do my own books?

From contributor B:

I've used QuickBooks since I opened my shop. It took some time to learn the full power of the program, but with some study and experience, it has been a worthwhile investment. If you're nervous, find an accountant who will audit your returns for the first few quarters. If you're diligent about entering data and know how to get it out, QuickBooks is just the thing.

From contributor C:
I use a combination of the two. I invoice and record payments, etc. through QuickBooks, and my bookkeeping service uses QuickBooks - so they come in and pay my bills and make sure everything is up-to-date and filtered properly. It only costs about $150/month for these services. My advice is to learn QuickBooks well enough to do what you need and outsource all the grunt work. You are much more valuable in the shop.

From contributor D:
We started out letting someone do it. It seemed easier that way. Then we learned that he didn't do everything he could have to save us money, i.e. all the write-offs and such. So now my wife runs QuickBooks and we pay estimated taxes quarterly. This way, at the end of the year, we typically get some back because the estimates are usually high. And we don’t have to start from scratch because it is just like filing it quarterly again. It also helps that my wife is an electrical engineer and very good with numbers.

From contributor E:
I agree with the other posts here. My advice is to get the latest version of QuickBooks Pro and have an accountant who uses QuickBooks help you set it up. You do the daily entering of invoices, sales receipts, materials and expenses (that's the easy but time consuming part that you don't need to pay a CPA for) and have them come in once or twice a month for a few hours to check you out, run reports and prepare whatever taxes there are to file - unless you just love to spend all your evenings in front of your computer crunching numbers - or if you have a wife that loves numbers. Mine doesn't, so we send our books to the accountant periodically. With QuickBooks you can even e-mail the accountant the file and they can do what's called an Accountant's Review, and then email it back. It is very simple and well worth the cost. You will save money in the long run.

From contributor F:
Is anyone using the specialized versions of QuickBooks - the contractors edition? Was it worth the extra money?

From contributor G:
QuickBooks has a rebate currently of $100 for upgrades. I was using QuickBooks Simple Start (which is actually quite good) and upgraded to QB Pro for about $80. QB Simple start cost me about $70. So all told I am into QB Pro for about $150. Not bad. They don't seem to be advertising it too much - and you have to purchase from a retailer - I used