Accounting isn’t as scary as it’s made out to be when you’ve got the ABS Institute on your side.
You’ve completed all the steps to starting a business – congratulations, you have turned your business idea into a reality! There are many factors that can be daunting about starting a business, and one of those is the money side of things. With the support of the ABS Institute, accounting doesn’t have to be something you’re confronted by. Accounting, when done properly, is beneficial to have as one of your many business skills for success!
Here are some of the reasons why learning more about accounting is important for your business:
- Every small business owner needs to know how to do some basic bookkeeping, this is non-negotiable as proper financial record keeping isn’t just good practice – it’s a legal requirement. Practising good bookkeeping means you will avoid late fees and overdue penalties, as well as ensuring your company has proper cash flow.
- It is vital to record transactions and maintain a systematic, accurate and complete record of all financial transactions that are readily available to review whenever required.
- Being able to plan and budget how to allocate limited resources towards accomplishing the objectives of the business.
- Assisting in a range of decision-making processes and helping you to develop policies to increase the efficiency of business processes, such as the price to be charged for products and services as well as the resources needed to make those products and services.
- It means you’ll most likely have the opportunity to form a business plan based upon your balance sheets, income statements, and cash flow statements that will provide direction for the running of the company, as well as being essential for attracting potential investors.
- Banks are likely to be more confident when dealing with business owners who have a handle on their business finances and understand financial implications.
- Helps you detect and avoid theft and frauds by customers, employees and suppliers.
- Being able to tell when you’re doing well and not so well.. You might be bringing in a lot of money at the moment but your incoming expenses may outweigh payday and that’s when you have a problem. When you don’t have any knowledge of accounting it can be difficult to realise when there is an underlying issue.
- Having the ability to read and understand financial reports as they are a reliable source of measuring key performance indicators, so you can then compare yourself against past performance and competitors.
You don’t have to become a complete financial guru, but understanding the fundamentals could mean all the difference in your small business’ long term success!
The ABS Institute offers a number of accounting and finance courses, as well as a self-employment assistance program to ensure that your business finances are always exactly how they should be. We provide nationally recognised qualifications that will give you the financial skills, knowledge and confidence in accounts and bookkeeping management for the modern world. To learn more about our accounting and finance courses, please head to: https://www.absinstitute.com.au/product-category/accounting-and-finance/.
