Accounting 101 – New Educational Series

Accounting 101

Anyone who’s worked in an office at some point or another has had to go to accounting.

They’re the people who pay and send out the bills that keep the business running.

They do a lot more than that, though.

Sometimes referred to as “bean counters” they also keep their eye on profits, costs and losses.

Unless you’re running your own business and acting as your own accountant, you’d have no way of knowing just how profitable – or not – your business is without some form of accounting.

No matter what business you’re in, even if all you do is balance a checkbook, that’s still accounting.

It’s part of even a kid’s life. Saving an allowance, spending it all at once – these are accounting principles. 

Accounting is critical in every type of business.

For example; farmers need to follow careful accounting procedures.

Many of them run their farms year to year by taking loans to plant the crops.

If it’s a good year, a profitable one, then they can pay off their loan; if not, they might have to carry the loan over, and accrue more interest charges. 

Every business and every individual needs to have some kind of accounting system in their lives.

Otherwise, the finances can get away from them, they don’t know what they’ve spent, or whether they can expect a profit or a loss from their business.

Staying on top of accounting, whether it’s for a multi-billion-dollar business or for a personal checking account is a necessary activity on a daily basis if you’re smart.

Not doing so can mean anything from a bounced check or posting a loss to a company’s shareholders.

Both scenarios can be equally devastating.

Accounting is basically information, and this information is published periodically in business as a profit and loss statement, or an income statement.

Accounting records are a very important part of running a home business.

Whether you purchase software or just an old-fashioned ledger, keeping track of the payments received and sent on behalf of your home business is a very important step in running a successful home-based business.

A lot of home business owners do not worry about accounting in relation to their home business, and this can be a fatal mistake for you and your home business.

Keeping a well ordered and accurate set of accounts is so important to every business, we have decided to publish a series of articles on this valuable topic.

On Finance Friday, for the next 10 weeks, we’ll be writing a series of step-by-step articles about accounting.

By the end of the series you won’t be a qualified accountant, but you will have gained a basic understanding of this important topic and what you need to do to keep your business accounts in order.

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Written by 

Co-Founder & CEO of Link Management Group. An Investor & Coach to Small Business Owners, for the past 30 years I have helped startup and early-stage businesses to enter new markets and achieve sustainable growth of both revenue and profits. I have experience across a diverse range of sectors including central government, information services, software, health insurance, pet products, couture fashion, entertainment and aviation.  How can I help your organisation accelerate growth and achieve its full potential? 

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