DIY accounting vs hiring an accountant: When to make the switch

DIY accounting works for a small, simple business. If you’re a sole trader with no staff, a modest number of transactions and turnover below the GST threshold, doing your own books with good software is a reasonable choice.

DIY accounting stops making sense once your business has more moving parts. Employees, GST, a company or trust structure, or a big decision such as borrowing, buying or selling all raise the stakes. At that point, the cost of errors, penalties and missed deadlines usually outweighs the cost of an accountant.

This guide to DIY accounting vs hiring an accountant covers what doing your own accounts really involves, what mistakes can cost, the middle-ground options, and the clear signs it’s time to get help. You don’t have to jump straight from doing everything yourself to handing everything over.

Key takeaways

• DIY accounting suits a simple sole trader with no staff and turnover below the $75,000 GST threshold.
• Staff, GST, a company or trust, or a major financial decision are the points where DIY stops making sense.
• From 1 July 2026, the ATO’s base late lodgment penalty can reach $1,820 for each overdue BAS or return, and it doubles for medium withholders.
• If a mistake means you underpay tax, the ATO’s base penalty starts at 25% of the unpaid amount, on top of the tax itself.
• Using a registered tax or BAS agent can protect you from some penalties, provided you give them complete and correct information.
• You don’t have to outsource everything. Software, a bookkeeper and an accountant can be combined to suit your business.

Is DIY accounting OK for a small business?

Yes, for some businesses. DIY accounting means you keep your own records, reconcile your accounts, and prepare and lodge your own statements with the ATO.

DIY accounting tends to work when your business looks like this:

• You’re a sole trader.
• You have no employees.
• Your income is simple and comes from a few sources.
• You’re not registered for GST and don’t need to be.
• You’re comfortable with accounting software and keep it up to date.

For a simple sole trader, the bigger risk isn’t the tax return. It’s letting the records slip.

The catch is that most businesses don’t stay simple enough for DIY accounting. Growth adds obligations quickly, often before the owner notices.

What does doing your own accounts actually involve?

Doing your own accounts means every obligation sits with you. Here’s what that looks like for a growing business.

Keeping records

The ATO requires you to keep business records for at least five years. That includes sales and purchase records, tax invoices, wage records, GST documents and records for business assets. Some records need to be kept longer, such as those used to work out a tax loss you carry forward.

If your business is a company, the Corporations Act also requires financial records to be kept for seven years. These records need to explain every transaction, not just show that money moved.

GST and BAS

You must register for GST once your GST turnover reaches $75,000. The GST threshold applies to your turnover for the past 12 months, and also to your expected turnover for the next 12 months. You then have 21 days to register.

Once registered, you lodge a business activity statement (BAS) with the ATO. Your BAS reports GST, plus any PAYG withholding from wages and any PAYG instalments of income tax. Missing a lodgment is one of the most common DIY problems, so it helps to keep the BAS due dates somewhere you’ll see them.

Payroll, STP and Payday Super

Employing staff is where DIY accounting gets much harder. You withhold tax from wages, report each pay run to the ATO through Single Touch Payroll (STP), and pay superannuation.

From 1 July 2026, Payday Super changed how super is paid. Super must be paid for each payday and must reach your employees’ funds within seven business days. Super is calculated on qualifying earnings, the employee payments the super guarantee is based on, such as pay for ordinary hours and commissions. Qualifying earnings are reported through STP.

If you pay staff and haven’t reviewed your payroll setup since that change, do it now.

Tax returns and year-end

Every year you lodge an income tax return for your business structure. For a company or trust, that means separate returns, financial statements and extra rules to follow.

Year-end is also where the most valuable decisions sit. What you do before 30 June can change your tax position. After 30 June, most of those options are gone.

What are the risks of doing your own books?

The risk isn’t that DIY accounting is impossible. It’s that small errors build up quietly and become expensive.

Getting the rules wrong

Australian tax rules are detailed, and the ATO applies them the same way everywhere. Common DIY mistakes include claiming the wrong GST credits, mixing personal and business spending, and missing deductions you’re entitled to.

DIY accounting mistakes rarely feel serious at the time. They usually surface later, when they’re harder and costlier to fix. creditte’s guide to common bookkeeping mistakes covers the most frequent ones in more detail.

Falling behind on changes

Tax and super rules change. Payday Super is a recent example. It moved super from a quarterly task to something that happens every payday, and it changed how super is calculated.

If you run the books yourself, keeping up with changes like this is your job too.

Losing time you could spend on the business

Every hour spent reconciling transactions is an hour not spent on customers, staff or pricing. Only you can put a value on that time.

Do the sum honestly. Count the late nights and weekends, not just the hours you plan for.

Being unprepared when someone asks for your numbers

Sooner or later, someone will want to see your figures. That might be the ATO in a review, a bank assessing a loan, or a buyer doing due diligence on your business.

A common worry is the company audit, but most small companies don’t need one. A proprietary company is a private company, usually with “Pty Ltd” in its name. Under the Corporations Act, only large proprietary companies must lodge audited financial reports with ASIC. A company is large if it, together with any entities it controls, meets two of these three tests:

• consolidated revenue of $50 million or more
• consolidated gross assets of $25 million or more
• 100 or more employees

Most small proprietary companies only need to keep written financial records. They don’t need an audit unless ASIC directs it or shareholders holding at least 5% of votes request one.

For most small businesses, the more likely scenario is an ATO review or a lender’s questions. Clean, current records make either one far simpler.

Making decisions on old numbers

Making decisions on outdated numbers is the risk owners underestimate most. If your books are months behind, every decision about hiring, pricing or spending is made on a guess.

Accurate, up-to-date numbers show you where your profit comes from and where cash is going. Regular financial check-ups matter as much as the annual return, because they keep your numbers accurate and up to date.

What can DIY accounting mistakes actually cost?

From 1 July 2026, a late BAS or tax return can cost an individual or small withholder up to $1,820 in ATO penalties per document. A mistake that leads to unpaid tax attracts a base penalty of 25% of the unpaid amount if the ATO finds you didn’t take reasonable care. Here’s how each penalty works.

Penalties for lodging late

The ATO can apply a failure to lodge penalty when a BAS, tax return, STP report or other document is lodged late. The penalty is one penalty unit for every 28 days, or part of 28 days, that the document is overdue, up to five penalty units.

A penalty unit is a set dollar amount the government uses to calculate fines. From 1 July 2026, one penalty unit is $364. Here is what that means for each late document:

A medium withholder withholds between $25,000 and $1 million a year, usually from wages, and has assessable income or GST turnover between $1 million and $20 million.

For example, a quarterly BAS lodged three months late falls into its fourth 28-day period. For an individual or small withholder, that puts the penalty at up to $1,456 for a single statement. Penalties are not tax deductible.

The ATO says it generally doesn’t apply the failure to lodge penalty for an isolated late lodgment, and it warns you before it does. The risk grows when late lodgments become a pattern, which is exactly what happens when the books fall behind.

Penalties for getting the numbers wrong

If a mistake in your BAS or tax return means you pay less tax than you should, the ATO can apply a penalty for a false or misleading statement. The base penalty is a percentage of the unpaid tax, based on how the mistake happened:

For example, if a GST coding error leaves $8,000 of tax unpaid and the ATO finds you didn’t take reasonable care, the base penalty would be $2,000. That is on top of paying the $8,000 itself, and interest can also apply. The ATO can increase or reduce the penalty depending on the circumstances.

How a registered agent changes the risk

Using a registered tax or BAS agent gives you a protection that DIY doesn’t. It’s called safe harbour.

• Late lodgment: if you gave your agent all the information they needed on time, you generally won’t be liable for the late lodgment penalty, unless the agent was reckless or intentionally disregarded the law.
• Errors: if a mistake was your agent’s failure to take reasonable care, and you gave them all the relevant information, you may not be liable for the false or misleading statement penalty.

Safe harbour isn’t automatic. The ATO says using an agent doesn’t, on its own, mean you took reasonable care. You still need to give your agent complete and correct information.

What’s the difference between a bookkeeper and an accountant?

A bookkeeper records the day-to-day activity of your business. That includes entering transactions, reconciling bank accounts, managing invoices and often running payroll.

An accountant turns those records into tax returns, financial statements and advice. An accountant looks at your tax position, your structure and what your numbers mean for your decisions.

In short, a bookkeeper records what happened, and an accountant explains what it means and handles your tax.

Registration matters for both. Anyone who charges you a fee to prepare or lodge your BAS must be a registered BAS agent or tax agent. Anyone who charges a fee to prepare your tax return must be a registered tax agent.

If you’re weighing up roles more broadly, this guide on whether you need a bookkeeper, finance manager or CFO sets out the differences.

Is there a middle ground between DIY and full outsourcing?

Yes. Most owners start somewhere in the middle and add support as the business grows.

You keep the books, an accountant handles the tax

You keep your own records in accounting software and an accountant prepares your tax returns and year-end accounts. Keeping your own books and outsourcing only the tax works well if you’re organised and your business is still fairly simple.

Doing your own books works best when you set up Xero properly from the start. A clean setup can save hours of fixing later.

A bookkeeper handles the day-to-day, an accountant handles tax and advice

Once you have staff or GST, handing the daily work to a bookkeeper frees up your time and keeps your records current. Your accountant then works from reliable numbers.

Full outsourcing with ongoing advice

With full outsourcing, your accounting firm looks after compliance and helps you plan ahead. That can include tax planning before 30 June, cash flow forecasting and virtual CFO support for bigger decisions.

Full outsourcing suits owners who want their numbers to guide the business, not just keep the ATO happy.

When should you hire an accountant?

Hire an accountant when your business takes on employees, registers for GST, operates through a company or trust, or faces a major financial decision. The full list of triggers:

• You take on employees. Payroll, STP and Payday Super add ongoing obligations every pay cycle.
• You register for GST. BAS lodgment becomes a regular deadline with real penalties if it slips.
• You operate through a company or trust. The rules, returns and record keeping are more involved.
• You’re borrowing, buying or selling. Lenders and buyers will test your numbers.
• The ATO contacts you. A registered tax agent can deal with the ATO for you.
• You can’t answer basic questions from your own numbers. For example, which products or services make money, or how much cash you’ll have in three months.

If even one of these triggers applies to your business, get your setup reviewed. You may not need full outsourcing, but you should know where the gaps are.

What should you check before hiring an accountant?

Choosing well matters as much as deciding to get help. Check these five things:

• Registration. Search the Tax Practitioners Board (TPB) register. Membership of a professional body is not enough on its own. An accountant must still be registered with the TPB to charge for tax work.

• Professional membership. Look for membership of Chartered Accountants Australia and New Zealand (CA ANZ) or CPA Australia. Both bodies hold their members to professional and ethical standards.

• What’s included. Ask exactly which work is covered and how fees are set. Some firms charge by the hour. Others offer fixed fees so you know the cost up front.

• Software fit. Make sure they work with the software you use, or can move you onto something better.

• Forward-looking advice. Ask whether they will only lodge your returns or also help you plan. The value sits in the advice, not just the lodgment.

How does creditte help businesses that have outgrown DIY accounting?

creditte is a Brisbane-based chartered accounting and advisory firm working with SME owners across Australia. creditte’s focus is simple: taking the compliance load off owners.

What creditte offers:

• Bookkeeping and accounting and tax, with a bookkeeping team and an accounting team under one roof
• Business tax planning
• Cash flow forecasting and virtual CFO support
• Business planning, asset protection, SMSF and superannuation, and support with buying or selling a business

creditte also has dedicated services for specific industries, including tradies and construction (with QBCC financial reporting), real estate agencies, property investment and development, transport and logistics, and medical and allied health practices.

Why business owners choose creditte:

Business owners choose creditte for practical, clear and personalised accounting and advisory support. We combine accounting expertise with business advice to help owners understand their numbers and make better decisions.

To see how creditte works with new clients, from the first call to a 12-month plan, visit the About us page.

Frequently asked questions

Is it worth paying an accountant for a small business?

Yes, once your business has staff, GST or a company structure. For a simple sole trader, doing your own books may cost less. Compare the accountant’s fee against the time you spend on the books, the risk of penalties and errors, and the cost of making decisions on poor numbers. A fixed fee makes that comparison easier.

Can I lodge my own BAS and tax return?

Yes. You can lodge your own BAS through ATO online services or compatible accounting software. Sole traders can lodge their own individual tax return, which includes their business income, online with myTax. If you use a registered tax or BAS agent, you may get extra time to lodge and pay.

Do small companies need an audit in Australia?

Usually not. Only large proprietary companies must lodge audited financial reports with ASIC. A small proprietary company generally needs an audit only if ASIC directs it or shareholders holding at least 5% of votes ask for one.

How long do I need to keep business records?

The ATO requires most business records to be kept for at least five years. Companies must also keep financial records for seven years under the Corporations Act. Some records, such as those supporting a carried-forward tax loss, need to be kept longer.

Can a bookkeeper lodge my BAS?

Only if they’re a registered BAS agent or tax agent, when they charge you for it. A bookkeeper who isn’t registered can still keep your records, but can’t charge you for preparing or lodging your BAS. Tax returns prepared for a fee need a registered tax agent.

The bottom line

DIY accounting works while your business is simple. Once you have staff, GST or a company, the question is no longer whether to get help, but how much.

If you’re not sure which level of support fits your business, book a discovery call and talk it through with the creditte team.

About the author

Morgan Wilson is the Founder and Director of creditte chartered accountants & advisors, a boutique accounting and advisory firm based in Fortitude Valley, Brisbane. He is a Chartered Accountant and CA ANZ member since 2015. Morgan helps Australian business owners with tax, cash flow and business advisory.

creditte works with small and medium businesses, typically teams of 5 to 50 people, with a focus on trades, construction and real estate. We help business owners make better decisions and build better businesses on better numbers.