Accounting Class

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Can Small Business Owners Benefit From Accounting Classes?

August 09, 2018 - 10:30 am
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With all the different roles they have to fill and daily tasks to complete, small business owners might not think accounting classes are worth their time and money. However, there are significant upsides to understanding the basics of accounting.

 

The importance of bookkeeping

According to Preferred CFO, the number one reason small businesses fail in the United States is due to poor cash flow management skills. Having a nuanced understanding of how to establish pricing and an ability to keep detailed financial records won’t stop a business with a low return on investment (ROI) from failing. However, taking a few classes can give an owner enough accounting know-how to anticipate a cash flow crisis and take steps to address it, such as securing a short-term loan, before the company goes under.

 

The value of business plans

Another mission-critical benefit of taking basic accounting courses is learning how to create and update a business plan. Once your company moves beyond the developmental business phase, you need a detailed set of goals before beginning a formal scaling-up process. This document is essential because it tracks a business’s performance and compares it to the achievement benchmarks designed by the owner. As such, it provides invaluable data for a company’s executives, as well as potential investors. Lack of a well-developed, formal business plan is one of the top three leading causes of small business failure in the United States.

 

The perils of not knowing

Small business owners can benefit from accounting classes that will teach them to detect any financial irregularities going on in their company before terminal problems arise. The unfortunate reality is, no matter how much you may trust your employees or third-party tasked with handling your business’s accounting, not knowing the particulars of the practice will leave your company vulnerable to fraud. Knowing the basics will allow you to pick up on potential malfeasance before it becomes devastating, both to the company and your own personal financial health.

 

 

This article was written by Mario McKellop for Small Business Pulse