3 Reasons Why You Must Understand Basic Accounting As A Business Owner

3 Reasons Why You Must Understand Basic Accounting As A Business Owner

By:


Businesses are like gardens. A really good one needs to be studied, nurtured and nourished to ensure that it grows and matures to bloom or bear fruit. Much like a garden, businesses also have cycles and seasons. You need to be able to understand the cycles as well as the context in which your business operates. These days, where over 95% of all businesses fail, it's not just about paying attention. You need to know a few fundamentals, particularly what to focus your attention on, so that you're not spending time and money on all the wrong things.

Here's a few vital tips from brilliant business mind Keith Cunningham-
1. If you want to be an active player in any world, you need to speak the language. The language of business is accounting. Accounts receivable, accounts payable, accrual and cash basis, as well as many other terms have to be familiar to you. Do you know the difference between a balance sheet, a P & L or profit and loss statement, Statement of Operations, and Cash Flow Statement? If not, you must. Don't miss the video series listed in the resource box.

2. Money matters should not be solely on the shoulders of your business accountant. As a business owner, you need to be familiar with all your numbers. We all know the stories of celebrities and professionals who end up crying in public because their accountants have fled with their money, but it could happen to you too. If there are discrepancies in tax reporting, it is the business owner who is chased, not the accountant.

3. Most importantly, knowing how to read the numbers in your business provides critical information that you require to make strategic business decisions. Essentially when you boil things down, accountants take business activities, convert them into numbers, and record numbers on a statement. When you understand what each of your statements means, then you should be able to accurately interpret the story of what is going on in your business, just by looking at these numbers.

With our economic challenges, business owners need to be vigilant and fine tune their business activities to stay ahead of the game and bear rich fruit from their labours. Without understanding your businesses financial data, you may as well be playing "pin the tale on the donkey". After all there is more to business than just learning how to make money, it's knowing how to KEEP MONEY.

About the Author:
Like the content? Want more?
Join Keith Cunningham in Sydney for his acclaimed 4 Day MBA Program July 23-26 2011
http://events.constantcontact.com/register/event?llr=aijev8aab&oeidk=a07e3vz3lne18977bef

Get Keith's Free Video Series- Don't miss Video 10!
http://www.youtube.com/playlist?p=PL0FD3A562AF915029&feature=mh_lolz



Article Originally Published On: http://www.articlesnatch.com


Tags: , , , ,

|

Loading...
Related....
Videos...

Recent Business Articles

Comments

Still can't find what you are looking for? Search for it!

Loading

Site Navigation:

Copyright 2005-2011 ArticleSnatch, LLC - All Rights Reserved.
Privacy Policy | Terms of Service.