It is thrilling to know that you can take some of the mystery out of running your business by learning the numbers. There are many business owners who don’t take their businesses as seriously as they should because the numbers frighten them. There are also some business owners who do not grow their business as they could because they do not understand the numbers. No matter what your business is, blogging, construction, medical practice or selling Mary Kay, there are numbers involved. In order to succeed and reach your full potential, you must learn the numbers associated with your business. Your business has many parts. Most business owners pay most attention to whatever it is that the business was created to do. However, the accounting numbers are an important part of the business that should not be ignored.
In many ways the accounting numbers that business owners must pay attention to are many and sometimes seem like blades of grass – one indistinguishable from one another. However, once you learn what the numbers are and how they relate to one another you will be able to distinguish them, just as you can distinguish each flower in a flowerpot.
No matter what your business is, there are certain financial numbers, reports and pieces of information you must track. These include:
- cash flow – the money coming in and going out with out classifying the money as a payable or expense
- expenses -anything that you have to pay in order to make money
- payables – actual cash flow out for bills such as rent, utilities, loan payments
- receivables – money that is due to your business
- depreciation – can write of the decrease in value of an item on your taxes
In addition, the following items must be reviewed on a regular and frequent basis.
- bank statements – these arrive monthly, review them as they come in
- tax obligations – there are taxes due to federal, state and municipal authorities, all at different times throughout the year
- general bills – some companies give discounts if bills are paid early and penalties for late payments
As a business owner, you must pay attention to these things so you can stay in business and operate in a financially responsible manner. Some business owners do not know what these numbers are, how to use them and why they matter. Some business owners rely on the expertise of their accountants and tax preparers. While it is important to hire professionals and to be able to rely upon their expertise, there i no excuse for not learning what theses numbers are and why they are important to your business.
In conclusion, it is thrilling to know that you can take some of the mystery out of running your business by learning the numbers. So, the question for you this thrilling day is, what are you going to do to learn your accounting numbers?