Accounting (and small business)

Every small business needs a bookkeeper, but few take appropriate advantage of accounting.

Accounting is a way to turn organized books into insight. Particularly:

  1. It can help us make decisions. Any data that isn’t going to help you make a decision is worth ignoring. More granularity isn’t better granularity.
  2. It can help us understand our cash flows. In any given moment, we know very little about a business. But over time, we can see how assets and expenses flow–and that flow is insight about what we own, what it’s worth and what could improve (see #1.)
  3. It can implement systems that build trust. When we know who is spending what and when and why, it’s easier stop micromanaging and focus on #1 instead.
  4. We can get better at predicting the future. Budgets based on past experiences are more likely to be accurate than those we simply make up in the moment.