I know what you’re saying…”accounting…sexy…yeah right!”

It’s the course in college everyone hated.  It’s the mundane part of owning a business.  It’s the countless hours you spend on evenings and weekends entering data.  It’s used when you have the annual dreaded appointment with your CPA.
Trust me, the list goes on and on, and I’ve heard it all.

But when you understand the end result, it’s like a beautiful piece of art.

Accounting, in it’s most basic sense, is the interpretation of all of your blood, sweat and tears in running your business.  It’s ultimately what allows you to know and understand your business in such a deep fashion, the inner working of your business.  And it should be used to guide you in making decisions about what to do, and more importantly, not do, in your business.

But most business owners don’t understand this.

Why?

Because they don’t quite understand accounting and it’s ultimate purpose.  And I don’t blame them.  Accounting is this mysterious enigma that only really smart introverts understand.  It has its own language that no one seems to understand but the accountant.

But here’s the deal…accounting is really just tracking what happens in your business with the ultimate goal of making financial statements – a profit and loss, balance sheet and cash flow statement.

And, when you understand what these financial statements tell you about your business, you can unlock a new way of running your business.

What makes money? What doesn’t make money? How much money does Product A make you…or lose you? Why do you show profits, but have no cash? What decisions need to be made for next month or next year?

You see, all these decisions can be made by looking at your financial statements, and your financial statements come from good old, boring accounting.

And I have never met an entrepreneur who did not want to understand their business better or make more money!

So, next time you think about accounting, think about how it can help you run your business better, and ultimately make more money!