One of the smartest questions that I hear from the owners of small creative agencies is “Can I do my own accounting?” I love hearing this question because it means that you are running your agency with intention and you are aware that your largest expense is paying people. I understand how the thought of paying for accounting services feels painful. If you have not had first-hand experience working with a dreamy accountant, then you do not yet know the value that you can get and so I am sure you feel genuine, physical pain when considering the expense.
The short answer is yes. You can definitely do your own accounting. Does hearing that make you feel relieved or overwhelmed? You are a smart person, you can do anything. Look at everything you’ve already accomplished.
Now that you know you can do your own accounting, let’s make sure that we all agree that the purpose of accounting is to provide useful information that helps you make decisions. What is the purpose of your accounting? What decisions will you be making for the agency and what information would increase your confidence in those decisions? Brainstorm unabashedly here and don’t stop to wonder what data could be measured to provide the information. First, just dream big and write the list down.
I am guessing that your list includes topics such as pricing proposals, when to hire new employees, profitability percentages, expanding your office space, cash flow management and so much more because you dreamed big. Yay for you! Are you more excited to make these decisions now that you know that your accounting will provide useful information? Great, that is the magic of accounting. It’s almost as useful as therapy.
So, let’s move forward with the plan to do your own accounting. The next considerations are time, tools, and knowledge. In all seriousness, these questions are much easier to answer if we replace the words “do the accounting” with “construct your office building.”
1) How much time do you need to construct your office building? This all depends on the time constraints you are facing and where your time is best used. If you have nothing going on for the next 3 days you could spend the time pouring the cement foundation for your office building. But, is there a better use of your time?
2) What tools will you need to construct your office building? You have a hammer and nails but do you have the automatic nail gun? Having the right tools can make your job much easier but knowing how to use them and keeping them running will take time. Budget for that time.
3) What knowledge will you need to construct your office building? As the leader of a creative agency, you have a strong ability to measure conversion rates but possibly low confidence about submitting the measurements for the window order. To complicate that further, you’ll need to know local building codes. What are the risks if you do it wrong?
I hope you don’t think I am being too playful with my construction parallel here. I use it because most of us feel some familiarity with both accounting and construction projects. I am happy to do some of my own house projects; the ones that have low risk if I get them wrong. For example, I love painting walls. We all have our own risk tolerance.
I can tell you that you can do your own accounting, but I can’t tell you if you should or not. It will depend on how complex the information is that you want to gather, how much time you have to devote to the goal, whether you are familiar with today’s tools, and what knowledge you bring to the table. If you aren’t clear on the answers, you should consult with an accountant and get their opinion on what your agency’s needs are. Ask them for a quote and ask lots of questions about what they can do for you. Even if you aren’t ready to work with an accountant yet, you will have started the process of finding an accountant when the time is right for your agency.
What else do you want to know? If you still have questions on this topic, feel free to email me at [email protected]. I may answer your question in my next blog.