Do your own accounting: the complete guide

Many companies are planning to keep their own accounts and are wondering about this strategy. Such a decision, not without consequences, must be taken with full knowledge of the facts. Compta-Facile presents a guide to do your own accounting , organized in three equal parts and answering the questions:

Summary hide

Can you do your own accounting?

What are the advantages and disadvantages of doing your own accounting?

What steps should you take to do your own accounting?

  1. Can you do your own accounting ?
  2. What are the pros and cons ?
  3. What are the steps to do your own accounting ?

Can you do your own accounting?

The answer to this question is, of course, yes . All companies , regardless of the accounting obligations to which they are subject, can decide to keep their accounts themselves . The choice to manage it on their own results from a decision on their part.

From a legal point of view, no text requires companies to have recourse to a chartered accountant to keep their accounts. Be careful however, if they choose to be accompanied by a professional (even partially), they can only delegate their work to a certified public accountant holding the diploma of certified public accountancy and registered in the table of the order of chartered accountants .

Doing your own accounting is an interesting solution but it is not recommended in certain situations. Indeed, accounting is a science in its own right which requires the mastery of a lot of knowledge (not only accounting but also tax, social, legal, etc.) and the practice of monitoring (the rules changing quite frequently over time) . It is quite rare to combine all the skills and support by a professional is, in practice, very widespread. Its mission may be limited to a simple review of the accounts and an establishment of the annual accounts.

For more information on this subject: can you do your own accounting ?

What are the advantages and disadvantages of doing your own accounting?

Advantages

There are generally three advantages: cost, business management and awareness of accounting.

The cost, and more particularly the savings achievable by ensuring internal accounting, is generally the triggering factor for the repatriation of accounting. Indeed, doing it yourself saves money and does not take the risk of engaging with a chartered accountant, when certain uncertainties exist on the sustainability of the project.

Then, in matters of business management, doing your own accounting allows you to better follow the level of the activity and its evolution . It should be borne in mind that accounting is not only an administrative constraint, it goes far beyond this simple aspect. It represents a real management, information and decision support tool. Ensuring its internal accounting and updating it regularly allows you to be more reactive and make the right decisions at the right time thanks to the development of tools (dashboards, financial forecasts, etc.).

Finally, doing it yourself has the advantage of becoming aware of accounting and understanding its operating principles, and more generally its cogs. This opens the doors to understanding in many other areas, especially in terms of ” legal or tax optimization.

For more information on this subject: what are the advantages  of doing your own accounting?

The inconvenients

The disadvantages unfortunately exist and they are four in number: time, risks, additional cost and lack of advice.

Doing your own accounting is usually a time consuming activity . By taking care of it himself, the manager or the head of the company devotes less time to other activities, such as the search for new markets and more generally the development of its turnover.

In addition, it can cause an additional cost for the company. It contains various hidden costs which it is important to control so that this solution remains interesting from a financial point of view: purchase or rental of accounting software, training of personnel in the configuration and use of the software…

It is also more risky for the company. The probability of making errors is greater: accounting error (inversion excluding taxes – VAT, change from writing upside down, accounting imputation error, etc.), error in text interpretation, etc.

Finally, this solution deprives the company of support and mainly advice . Support, even partial, allows him to benefit from a non-negligible range of services: optimization of the tax framework, rationalization of the legal framework, compensation / dividend arbitration.

For more information on this subject: what are the disadvantages  of doing your own accounting?

What steps should you take to do your own accounting?

With the development of online management solutions, it is now much faster and easier to do your own accounting . Here are the steps to follow .

Know your accounting obligations

First of all, doing your own accounting involves knowing the accounting obligations of your business . It is necessary to know the extent of the work to be carried out. Unsurprisingly, these will be numerous in commercial companies (SARL, SAS, SA, SNC, SCA, SCS, etc.) and assimilated (liberal practice companies). They will be slightly less important for traders and craftsmen carrying out their activity within an individual enterprise, few in number for the liberal professions exercising in their own name. Finally, they will be almost non-existent for micro-entrepreneurs, formerly called self-entrepreneurs.

Find accounting software

This is the most delicate step in the process. At this stage, it is necessary to choose the accounting software that best meets the needs expressed by the company. It is essential to make a preliminary point in order to determine the perimeter of the needs of the company in terms of use and budget. On this occasion, the company will be able to realize, for example, that it is possible to choose an accounting software which also manages the invoicing and which allows an automatic integration of the invoices in the accounts.

Configure your accounting software

Once the accounting software has been chosen, it is necessary to configure it. It is important to devote the time it takes because the configuration is essential for the accounting software , as for any other management solution for that matter. It will be a question of filling in all the characteristics of the company, creating user profiles and assigning them rights, choosing an accounting plan and personalizing it, opening the newspapers hosting the accounting entries and programming all time-saving features: automatic accounting entry guides, automatic lettering, automatic recovery of bank statements, automatic integration of invoices, etc.

Enter your operations and make a balance sheet at the end of the year

During the year, all the accounting documents affecting the assets of traders and craftsmen must be recorded in the accounts: invoices, bank statements, tax declarations, payroll journals, cash fog, etc. A book-journal as well as a large- book must be kept. As far as the liberal professions are concerned, most of them are authorized to keep treasury accounts: only bank statements are recorded. This procedure is called accounting entry.

At the end of the year, traders and craftsmen must count and assess their stocks, quantify the possible risks they run, record inventory entries (charges and products recognized in advance, invoices not received, invoices to be drawn up …), Establish annual accounts and deposit them with the registry of the commercial court. Liberal professionals must complete a recipe book as well as a register of fixed assets and depreciation.

 

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