Do you find accountancy fascinating? Some of my clients love it. I’ve met engineers, stock brokers, shop keepers, hoteliers and others who want to do as much of the work as possible themselves though they’ve never had any accountancy training. I enjoy training my clients and am happy to tell them as much as they want to know about Xero, accounting and tax but I sometimes wonder if it’s cost effective for business owners to take their eye off the ball and spend a lot of time on accounting rather than focusing on their own business.
If you’re good at precision data entry of numbers and dates and disciplined enough to sit down at your computer without interruption and enter data on a regular basis, then you should be fine with basic bookkeeping. But I think you have to know when to leave it to a professional to take over with the more complicated stuff. This applies to both more complex accounting issues and to more complex mechanics of the Xero accounting program.
I know the feeling, “if you want a job done properly then do it yourself”. And perhaps you’ll save some accounting fees. But when I’m wondering whether to do a job myself or call in a professional, I always ask myself “Is this the kind of job I’ll do on a regular basis”. If yes, then that’s a good argument for doing it myself. “Use it or lose it”. This certainly applies to accountancy; if you learn something and apply it regularly, then you will probably remember it. But if you learn something and do it, say, only once a year, each year you will probably forget how to do it and waste time relearning it, probably take much longer to do it than a professional and might even make things worse.
Be warned that, although accounting software such as Xero aims to make accountancy simple and even “beautiful”, in my opinion that only applies to simple data entry of bank transactions, sales and purchases. Even those transactions can get complicated in the face of intercompany transfers, multiple currencies, perpetual inventory, withholding tax and consumption tax. And Xero does have some powerful features which can speed up tasks but can be dangerous in the hands of the inexperienced.
And remember that Xero is a generic, global accountancy program designed to suit all small businesses everywhere. So things like consumption tax and payroll must be custom built to suit Japan.
So by all means give it a go and if the results are successful and you are doing it on a regular basis, keep at it, practice makes perfect and I’ll enjoy telling you as much as I know. But if it’s something you will only do occasionally, such as preparing accounts at the end of the year, then I recommend you leave it to a professional like myself who is doing such work almost daily.