Read Time: 3 Minutes
The Hidden Cost of Bad Accounting
Hi Reader
I know we’re all trying to save money in this tough economy, but sometimes the “savings” cost more in the years to come.
Accounting is one of those areas where cutting corners quietly costs you hundreds of hours, thousands of rand, and a lot of unnecessary stress.
Let me show you what I mean.
Story 1: “Mom Does the Books”
A business owner once told me her 85-year old mom handled the bookkeeping and that she’d file her own tax return.
They were using a complicated accounting system, that she clearly did not understand, and when I opened the books, I found:
✔️Weird suspense accounts that didn’t balance
✔️Duplicated transactions
✔️Pages of numbers that simply didn’t make sense
When an accountant asks: “what is this?” over and over again, that is not a good sign and I was asking that a lot!
Good books are the foundation to a good business. When your books are wrong, your decisions are wrong. And you risk:
- Making choices based on unreliable data
- Submitting incorrect tax returns (and facing penalties)
- Spending more to fix the mess later
The cost of a good accountant: a predictable monthly fee.
The cost of a bad accountant (or DIY books): time, frustration, stress, penalties, and even more money later.
If you want to build a business to serve your family and your community, accounting shouldn’t be your focus, even if you are a trained accountant. Your job is to keep the business earning money, not balancing suspense accounts.
Story 2: “I’ll Save Money by Not Filing”
Another client had been in business since 2017 but hadn’t submitted a single tax return for his company or himself.
His former accountant told him not to bother with registered staff, so he paid everyone as “independent contractors.”
Besides the tax grey area he was living in with the above advice. Apart from the tax grey area he found himself in because of the above advice, he also had not taken a salary in eight years, because he did not want to pay PAYE.
Can you survive with not being paid for 8 years? I know I can’t.
Here’s the additional cost to him:
- Missed the chance to reduce company taxable income through salary expenses
- Lost around R123k in personal tax rebates, and R686k in tax-free salary
- Missed out on the cheapest way to take out profits from the business, which is through taking out a salary and will thus,
- Owe more company tax overall
Now, SARS has come knocking. Because he hasn’t been compliant for years, he does not qualify for the Voluntary Disclosure Programme.
That means:
- Penalties for non-submission
- Interest on unpaid taxes
- Permanent loss of rebates
All because he thought doing it himself would save money.
Why DIY Accounting and Tax Rarely Works
For very simple startups, DIY bookkeeping can work, for a while.
But for most small businesses, it quickly becomes a hidden cost.
Here’s why:
- It steals time from actual revenue-generating work.
- Errors snowball into major financial headaches.
- Professionals often spend 10–30 hours fixing DIY records before they can even analyse them.
- Adding payroll, PayPal/Stripe, or inventory management makes DIY almost impossible to manage correctly.
The smart middle ground:
When you are starting out a hybrid setup can work, you handle the daily admin, and a qualified accountant sets up the system, reviews it regularly, and closes the year properly.
Then when it gets too much to handle, hand it over to an accountant to take all of it over.
That’s how you stay compliant, confident, and focused on growth.
The Takeaway
If you’re still doing your own books, pause and ask:
What is this really costing me? How many hours have I taken away from growing the business?
Bad accounting doesn’t just cost you money, it costs you time, clarity, and peace of mind.
Invest in someone qualified, trustworthy, and proactive. Your books are everything, they are the backbone of your business, treat them that way.
Click here for checklist on what good books look like:
Ready to stop worrying about your books?
Talk to me about your accounting setup.
Until next time,
P.S. Have you ever dealt with bad bookkeeping or tax issues?
Hit reply - I’d love to hear your story.