Archive for the ‘Accounting’ Category
Do You Know Enough About Accounting?
While accounting for your business may seem like a pain and is usually something that most business owners just can’t do (they are good at their business – just not at accounting for it) – without proper accounting and understand how money flows through your organization or how certain business decisions effect your profitability, you might find yourself in the same situation as many other owners who are growing their business broke.
Image your business makes a great product that it sells for $100. But, the business has to keep borrowing funds because it is always out of cash.
Through accounting, this business might understand that its cost (direct in the making of the product and fixed – all its overhead to include salaries, rent, marketing, etc) are twice that amount. Thus, without understanding your business via accounting, this business does not understand that it is losing money on each sale or essentially giving away its product.
Accounting can teach you where your business needs to cut, where it needs to improve and how the company can make more money with fewer expenses.
To see a story of another business in this situation that was almost fatal to it, check out this story from the New York Times.
