To DIY or not to DIY, for many small businesses that is the question

Resources are limited, cash is tight and you've got a business to run. (No matter what happens with this election.)

If you are a small business owner, and something needs to be done, you may suddenly find yourself becoming a master of DIY (Doing it Yourself.) 

There are times when running to the Home Depot for that ball-peen hammer makes sense. But there are other times when DIY means DIW (Doing It Wrong). For a small business, Doing it Wrong can  lead to costly penalties and in extreme cases, financial disaster. 

Here are some suggestions about when to go it alone and when to get help.  

DIY (Do it yourself)

1. Accounting. Keep track of your transactions using one of the many small business accounting packages on the market - including desktop products like Sage 50 or QuickBooks and online solutions like Xero and Freshbooks. (By DIY here, I mean keep your transaction processing in house if you like or outsource it to folks at a company like Deep Sky Accounting who can become a virtual member of your team.) 

2. Approve invoices. As a business owner, you want to review vendor invoices and approve payments due. You also want to keep track of any new vendors that are added to your automated accounting software. For added security on checks that you write, you might want to consider adding a positive pay option at your bank. (Positive pay is a solution that involves transmitting your check register in electronic format to the bank so they can compare it with any checks that are presented for payment on your account.) 

3. Deposit checks. Consider making bank deposits from your desk using one of the many scan and deposit solutions available from most banks, including smart phone apps. Here's an example of a scanner-based solution from Bank of America. 

4. Set financial goals. As the owner of a business, you need to be the one setting the agenda and determining high level financial goals. But if you have more than one employee, you need to get your team involved in deciding how to achieve those goals. (See number 4 below.) 

5. Pay taxes. Make sure you stay on top of all tax payments due. While you may outsource the responsibility for tax filing and even payroll processing, the responsibility for paying taxes rests with you, the owner. 

6. Set expense policies. As the owner, you need to determine expense reporting and reimbursement policies. 

7. Drive sales. Who better than the owner to monitor sales results and to make sure that the needs of your customer are being met? You need to build a culture that makes customer happiness a top priority. 

Don't DIY (Don't Do it yourself. Get help.)

1. Financial statement preparation. While keeping track of your transactions is a job best done by someone at your company, creating financial statements in the proper form can require special knowledge. If your financial statements will be shared with a banker or other external party, you might want to seek out the help of a CPA or accountant. They can help you decide if you need compiled financial statements, or the additional assurances provided in a review or audit engagement. Whatever you do, please don't send your tax return to the bank in lieu of a financial statement. 

2. Check writing. Don't waste time writing, signing, and mailing checks. Automate payments using online banking or one of the cloud payment solutions like Bill.com.

3. Customer collections. If you are spending your time making phone calls to your past due customers, there is a better way. Turn to automated solutions like A/R connection ( A QuickBooks addon) or CRM-based tools like Sage CRM collections manager  to simplify the process of staying on top of customer payments. 

4. Create budgets. Don't do this alone. Get members of your team involved in determining budgets for their areas and driving results from the bottom up. 

5. Payroll processing. By all means, let someone else handle this time-consuming and high risk chore. Just make sure you are dealing with a reputable payroll company and that your remitted funds are getting to the proper tax authorities. I had a client who used a payroll provider and remitted tax deposit funds to them. When the provider failed to make payroll tax deposits, guess who had to pay the IRS? 

6. Expense reimbursement.  Use technology to take the pain out of expense reporting and reimbursement for you and your employees. Look to apps like Expensify and Concur Travel and Expense to simplify the entire process. Your employees can take a picture of a receipt for dinner with a client, send it to an app on their cellphone, and submit their expense report online in a matter of minutes. With a company version of the solution, you can then approve and reimburse the expenses and deposit the funds directly into their account. 

7. Sales tax management. Don't even think about keeping track of these taxes by hand. If you do anything other than sell from a single retail location, you need to get an automated sales tax solution like Avalara or if you are in the wine industry, you need a sophisticated compliance tool like ShipCompliant to keep you out of trouble. (You can't even imagine the rules and regulations that can trip you up in the wine industry. Talk about driving a person to drink.) See my prior post on sales tax solutions and DIY that I wrote for www.theprogressiveaccountant.com here. 

Photo via Ktow on Flickr.