Still deciding
Should you keep doing your own books?
For some owners this is genuinely the right answer for a while. The problem is that it stays the answer long after the arithmetic has stopped supporting it.
Reviewed by Darren Lim, US CPALicence CPA.742536028 min read
Plenty of contractors should be doing their own books, and are told otherwise by people with something to sell.
So: when it is genuinely the right call, when it stops being one, and how to tell which side of that line you are on.
When doing it yourself is the right answer
You are one person with simple money. One bank account, one card, no employees, no subs, under a couple of hundred transactions a month. The software handles most of it, you reconcile monthly, and there is genuinely nothing here worth paying someone for.
Cash is tight and this is where it has to come from. A real answer. If the choice is between doing your own books and not making a truck payment, do your own books. Just do them properly rather than not at all, because the version where you stop entirely is the expensive one.
You are good at it and you do not mind it. Some owners like the control and find it takes ninety minutes a week. If that is you and the reconciliation ties, there is no argument here.
You are testing whether the business works. In the first year, when you are not sure this is going to be a business, doing it yourself while you find out is reasonable.
If two or more of those describe you, the honest answer is: keep doing it, and skip to the last section.
The signs it has stopped being the right answer
Not one of these on its own. Three or more together is the pattern.
It is not actually getting done. Not "it takes too long" — it is genuinely two months behind, and every month it slips further. This is by far the most common signal, and the one owners rationalise longest.
You reconcile by adjusting. The difference will not resolve, so you post an entry to make it agree. Once that becomes the habit, the file stops meaning anything and every number after it is unverified.
You cannot answer questions you should be able to answer. Which jobs made money. What you are owed and how old it is. Whether last quarter was better than the one before. If the answer is "I would have to work it out", you are not getting management information out of this — you are doing data entry for a tax return.
You are doing it at 10pm. After a full day. This is the cost nobody counts, and it is not neutral: work done tired is work done wrong, and it is coming out of the part of your life the business was supposed to pay for.
Your CPA bills you for cleanup every year. If that email arrives every March, you are already paying for bookkeeping. You are just paying professional rates for it, once a year, at the worst time, and getting no monthly information in return.
There are now employees or subs. Payroll liabilities, 1099 tracking, certificates of insurance, workers comp exposure. The consequences of getting these wrong are no longer proportionate to the effort of getting them right, and some of them are personal.
What it is actually costing you
Not the hours. The hours are the smallest part.
Decisions made on old numbers. Books two months behind mean every decision this month is made on numbers from two months ago. In a business where material prices move and margins are thin, that is the whole game.
The work you cannot see. Company totals cannot tell you which jobs pay. Cost one job properly and see whether the answer matches what you assumed — for most contractors it does not, and the gap is worth more than any bookkeeping fee.
Your own time at its real value. Four hours a week is roughly two hundred hours a year. Value those at what you actually produce with an hour — selling, quoting, running the crew — rather than at what you would pay someone to do the bookkeeping. That is the true comparison and it is not close for most owners past a couple of trucks.
Errors nobody catches. You do the work and you check the work. That is not a control, it is the same judgement applied twice.
The middle ground
It does not have to be all or nothing, and for a lot of contractors the right answer is a split.
Keep the parts that need you: invoicing, chasing your own money, approving bills. Hand over the parts that are recurring, technical and unforgiving — reconciliation, monthly close, payroll and sub compliance.
That keeps you close to the money without keeping you responsible for the part where being wrong is expensive.
How to decide this week
Do one thing: close last month properly, start to finish. Reconcile every account, categorise everything, produce a P&L and a balance sheet, and age the receivables.
Then note two numbers. How long it took, and whether you would trust the result in front of a lender.
If it took ninety minutes and you would, carry on — you have this handled, and nobody needs to sell you anything. If it took a day and you would not, you have your answer, and it did not come from an article written by someone who wants your business.
Related
How we do this
We build this into your books. Starting with a month that costs you nothing.
We take the recurring weekly work — categorising, reconciling, chasing what does not tie — and leave you the part only you can do, which is deciding what to do about what it says.
- Every transaction categorized, accounts reconciled, the month closed
- Reviewed and signed by Darren Lim, US CPA — licence CPA.74253602
- The Two-Day Guarantee: Your first month back in two days, or the next month is free.
The cost of doing it yourself is not the hours. It is the decisions you make on numbers that arrived three months late. One month done properly, free, shows you what current numbers actually look like.