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By: Ronda PaynePublished On: August 30, 2019
To some people, numbers, spreadsheets and bookkeeping may sound boring, but for others, it is exciting. A certified bookkeeper has their finger on the pulse of a business’s financial health at any given time.
It is anything but boring.
Finance is a language in and of itself, and graduates of a certified bookkeeping or accounting program know how to speak the language. They are vital to any business, and here is why:
On the business owner/manager side of things, there’s still plenty to enjoy and look forward to:
For example, the records show that Facebook ad spend was $250 for April, May and June then jumped up to $500 for July, August and September. You can talk to the marketing team to find out why the expenses have increased; who authorized the payment and so on. This way, you can track all the expenses across your business.
For example, say you run a small food processing company, and one of the retailers is always late on payments. Knowing this allows you to have a conversation with the retailer to find out why they are always behind. They may not be good at record-keeping, in which case you will learn that sending them a reminder to pay at 30 days may get you your money faster. Or, if they are having cash flow issues, you know not to send more products until their previous payments have been made.
For example, imagine you’re a candy company. When you dig in and take a look at the product lines, you find that licorice, which has always been a top performer, is still at the top. It isn’t growing in sales volume, but it isn’t declining either, it just carries on strong. However, those gumballs that you introduced last year, which did well for the past few months have now dropped in sales. Is it due to a dip in promotions or has the product lost its popularity?
Companies won’t always drop products just because they are low sellers. They also have to consider profitability. If the licorice earns 0.05 cents a package, but the gumballs make you 0.25 cents a package, you may be willing to keep a slower seller because overall it’s more profitable and is still adding to the bottom line without taking anything away from the company. Looking at the reports will help you understand what a low seller is, what is a low-income earner, and what you need to keep an eye on.
Knowing how to maintain and read financial reports can help you run your business and save you money. Investing in accounting courses also helps you t0 save money in the future because you will be more informed about tax credits and regulations. Good bookkeeping improves decision-making and helps companies analyze the overall business performance. It’s an interesting and rewarding career.