Do you want to open your own business? Generally, an individual needs no formal training or special business skills to start a business. But this doesn't mean you shouldn't get some training that will prove useful in actually running a successful enterprise. One of the most useful skills you can learn is accounting. Why take accounting classes just to become a business owner? Here are 5 important reasons.
1. You Know Your Own Finances. When you don't know how to prepare or read financial reports or how to track the flow of money in your business, you are at the mercy of others. You must trust that your bookkeeper, accountant, tax preparer, lenders, and others are acting properly and in your best interests. On the other hand, if you know what to expect for things like tax remittances, you will know if they are entered correctly, paid on time, and in the correct accounts — whether or not you do the entries yourself.
2. You Can Analyze Problems. A basic understanding of accounting concepts helps you analyze your own business weakness and strengths. For instance, through job costing, you can determine on your own if a particular project or product line will be profitable. You'll also be able to see how to make changes that will boost profitability in the most effective manner.
3. You'll Probably End Up Doing the Books. Early in its life, a small business usually can't afford to hire many people. The owner ends up wearing many hats and taking on work that they may not be trained for. Accounting is one of the areas most commonly handled on a DIY basis for a young company. If you're going to end up doing the books anyway, you should learn how to do them correctly.
4. You Could Save Money. Even if you have the funds to hire a service or individual to do the books, though, could that money be better used elsewhere? If you have the training to do basic bookkeeping or financial analysis you'd otherwise have to pay for, you can put that money to better use. It could be spent growing the business rather than entering numbers into software.
5. You Can Talk 'Accounting'. As a business owner, you will be expected to be able to converse about a number of important business concepts. Finances are one of these. You'll meet with lenders and suppliers, have to convince investors of the company's soundness, and will work with an accountant on planning. The more fluent you are in accounting lingo and concepts, the more you'll impress others and have effective meetings.
Which of these reasons would best benefit your business? No matter what your goals and what you lack in training, accounting school can help. Learn more by meeting with a counselor at a school in your community today.Share