Understanding of the accounting information is the key to the successes and failures of the business entity. Business owner needs to understand the financial data in order to make appropriate business decisions, and to avoid future failures of the business continuity.
Accounting is the language of business. Company needs to communicate their results to the world. The audience includes employees, investors, creditors, customers and suppliers. Within the company, accounting information provides a means to CONTROL, EVALUATE and PLAN operations. Whatever it is, the accounting is NUMBERS. Accountants (a-count-ants) “count the beans” so that business activity can be recorded, summarized and analyzed.
A proper accounting system is not a luxury that small businesses can do without, it is a necessity that they cannot afford to be without. Thus, mindyourowncompany.net is designed to help a small business owner to take the first steps in accounting.It explains in a simple word to make a small business owner with / without accounting background easily to understand on;
1. what accounts are,
2. why you need them,
3. what they mean,
4. how it relates to the real world,
5. how it helps small business owners, and
6. It also explains the minimum accounting records that your business will need to keep.
How to Do Accounting
In modern times, accounting has gone beyond the physical count of grain in storage. Accounting answers almost all basic questions about the business.
- What does the company own?
- How much does the company owe others?
- How well did the company’s operations performs?
- How does the company get the cash to fund itself
- How many the company making profit for this year?
All company activities must eventually be measured in DOLLAR, and that is where accounting comes in, like or not. Although the areas may appear tedious, you must have a working knowledge of accounting to function in the business world. Because knowledge is power, so entreprenur needs to be literate in accounting understand its function; more important, they must be able to ask for and use accounting information for decision-making- purposes.