Ask HN: Entrepreneurs who do their own bookkeeping and accounting

10 points by m33k44 2 months ago

Would love to hear from entrepreneurs who do their own business accounting and bookkeeping: - How did you learn accounting and bookkeeping, what resources did you use? - How did you simplify the financial process of your business? - What simplification did you make? - Do you get our financial statements audited? - How do you use your company's financial data for decision making? - And what financial data do you use for decision making purpose?

Thank you!

ThePhysicist 2 months ago

There are two types of bookkeeping: External and internal. External bookkeeping is what you do for the government / IRS to determine how much taxes you pay. Depending on your company type and country this can be quite complex and personally I would never attempt to do it myself as you can get a tax accountant / lawyer to do it for you for a reasonable price and learning to do it yourself will take many months or even years. Also, if you go through a tax accountant you can transfer a part of the legal risk of bookkeeping to them, which is one thing less you’ll have to worry about (there are enough other things to keep you awake at night as an entrepreneur so you really don’t want to also worry about your tax declarations; I’ve been there myself). If you are a one-person business it might still be manageable but even then I’d say your time is better spent thinking about your core business instead of worrying about bookkeeping.

For internal bookkeeping you can do whatever you want and you don’t have any legal restrictions, you would typically make use of this to measure the performance of your company and make sure you don’t run out of money. If you’re a small company I would use the data your tax accountant provides to you and simply put it in a finance plan in Excel to see how you’re doing. The core metrics you’re interested in are probably revenue, cash flow, cost and profit I’d say (current, past and projected future values ideally). There are many guides available on the Internet for this, look e.g. for business planning as a keyword.

nik736 2 months ago

I have a tax adviser but I do most of the things myself and let her look over it. 4 Years ago I had no clue what had to be done but I didn't want to give it away because it's an important topic and I want to know what has to be done. So I let her show and explain me basically everything (of course I paid them for it).

If you give it away completely, at least here in Germany they are paid based on revenue (%) so they get their money anyways and as it usually is they want to have the easiest path so they cut corners and not always have your best in mind. They are paid the same, if they save you money or not.

This was honestly the best decision I made because I learned a lot about taxes, businesses in general and ways to optimise my company. That would've never happened if I would've chosen the easier path back then. Of course it takes some time, and might distract you from your day-to-day business, but it's knowledge you will benefit from your whole life.

aspantel 2 months ago

At one point we got ourselves a QuickBooks Online account and found a bookkeeper to help us enter and reconcile all data into QB monthly. Works great and having such a bookkeeper is pretty cheap. For taxes we use an accounting firm but having the up-to-date QB account helps alot. -A