The business world is full of endless opportunity to make it big, or crash and burn. Small businesses crop up every day, but very few of them last to see a second anniversary, even when their basic idea was a good one. In this world, the difference between success and failure is in knowing how to work the numbers. Those who learn to unlock the secrets of financial statements win; those who muddle through and leave the numbers solely to the “numbers guys” often lose their shirts.
From the outside, accounting seems daunting, overwhelming, and complicated. Some of it is, and that's the part you can leave to the professionals. For the rest, for the everyday stuff, all you really need to know are the basics — but you do need to know them. Especially in a company's earliest days, seemingly small financial decisions can present huge consequences. Making these decisions without an intimate understanding of your company's financial picture and the potential impact of each decision is like a crapshoot; they could work out, or they could kill your business with a single shot. Backed by insight and information, though, every decision can lead to prosperity.
When you get a firm grasp on the basic principles of accounting, you'll be able to monitor and control your company's financial position. Every business faces obstacles and suffers financial setbacks. Keeping your company afloat is hard; turning a steady profit is even harder. When you understand how to use accounting information to your advantage, you'll be more able to lead your company quickly back to a more profitable track.
That's how this book can help you. When you have a working knowledge of accounting, from daily transactions to formal financial statements, every crisis can be reduced to numbers — numbers you will know how to manage well. In addition to knowing the basics of bookkeeping, you'll be able to minimize taxable income without sinking your profits, maximize cash flow without skipping payments to creditors, and use your business to help you build personal wealth. After all, that's one of the main reasons you started your company.
The bottom line: You won't be able to proactively affect your company's bottom line without understanding all the numbers that go into it. You undoubtedly plan to stay in business, to grow your business, and to make some serious money. The information in this book can help you achieve those goals.