Owning a business involves confronting a never-ending conundrum – should I hire someone else to do it, or should I do it myself? Broken down further, the decision is between the cost of spending your own time to complete an activity and the money lost performing an activity outside of your area of expertise, or the money gained by having a professional give you that expertise and save you that time. Accounting yourself is expensive, especially if you’re not an accountant – here’s why.
Accounting Takes Time
How well do you know Canada’s tax code? Probably not that well. Even if you do know it pretty well, you probably don’t know it as well as an accountant. That means you’re going to have to spend hours in order to properly understand all the tax regulations that affect your business, your income, and your family. Accountants have already spent hundreds of hours studying and practicing this stuff; there’s a reason CPA certification is hard to come by.
The hours we just talked about are just for studying. After that, you’re going to have to spend more hours actually applying what you’ve studied to every single transaction your business undertakes. Once you submit your taxes, you’re good to go – unless, of course, the CRA decides to audit you. In that case, you’ll have to spend even more time preparing all the documents that are being audited, making your arguments to the auditor, arranging for meetings with them – the list goes on. How much is your time worth? For most business owners we know, the answer is a lot. That time shouldn’t be spent on something that’s outside of your area of expertise – hire an accountant.
Bad Accounting Costs Money
There are a couple of ways in which bad accounting can cost you. The first we mentioned in the section above – you can get audited. An audit costs you more than just time; if the auditor finds you declared improperly on your tax returns, you’ll end up having to pay interest on the amounts owed. That interest can add up. That plus the time it takes to do your audit means a lot of cash coming out of your wallet.
The second important way bad accounting can cost you? You may not know to claim some tax benefits you’re absolutely eligible for. Further, tax rules are constantly changing and increasingly complex. Missing out on tax deductions, or worse, inadvertently claiming things you aren’t entitled to can result in tax reassessments, interest and wasting precious time.
The reality is, tax accountants in Winnipeg are worth more than they charge. They have the complete expertise, they focus on the ways you can save money as a business, and they can help you with more than just end-of-year taxes. You don’t want to spend time and money on accounting yourself – hire a CPA.