Lets first start with the cost of making errors, or doing your books incorrectly. As an example, say that you are a DIY bookkeeper for your business, but you incorrectly account for some of your transactions. As a result of your incorrect accounting, one of two things will happen. First, come tax time, a good CPA will uncover these mistakes, and need to work with you to correct them. This can lead to extensive back and forth, and cause you to rack up a hefty bill with your CPA, sometimes in the thousands of dollars. The second outcome is that your CPA glosses over the mistakes, and you file your tax returns using incorrect information. This can be dangerous for a variety of reasons, but can also be costly if you are audited and mistakes are uncovered that would have created a higher tax liability. The penalties and interest charges can be huge, and will almost certainly exceed the cost you would have incurred to simply get things done correctly from the start. In general, if you don’t know what you’re doing– outsource your bookkeeping. It’s not worth the costs of doing it incorrectly. However, for the financially literate bunch, there still are situations in which it does not make sense for you to be doing your accounting.