The Bookkeeping Business Owner

Have you ever asked someone what are the most important things to know when starting your own business?  What answers did they give you?  "You need to know what you want to do, and who you want to deal with."  "Appearance is everything."  Sound familiar?  What about, "Know your finances and how to take care of them."  It's funny how wise these statements are, and how many people do not heed them.

Today, with computers taking over every day tasks, many people hide behind them doing their business like paying bills, marketing to strangers, and even handle their finances through programs like Quickbooks.  Here is a question: how many business owners understand the numbers they just inputted into Quickbooks?  Sure, they may understand income and expenses, which is important to every business.  What about their assets?  Liabilites?  Equity?  Do they understand the importance behind these categories?  I hope so.  As a business owner, they should understand these five areas of finance that no business can escape from.  Their livelihood depends on it!

Bookkeeping is where one learns these five areas of business finance.  There is no excuse for a business owner not to know bookkeeping at some level.  Can you imagine if you, as a business owner, did not understand how your equity is determined?  Could you, as a business owner, feel good about yourself if you did not understand the difference between a Profit & Loss statement vs a Balance Sheet?  Could you even dare run a business if you did not know the difference between a debit and credit?

How many businesses have failed as a result of poor bookkeeping?  It is CRITICAL that every business owner have just, at the very least, some knowledge in bookkeeping for the sake of their business and being smart financial decisionmakers.  It is amazing what a little bit of knowledge can do for you and your business in the long run.