We are going to give you three reasons why understanding accounting is important for non accountants any ways I digress I was scrolling through the comments and I came across this one from Bob searched. i hope I am pronouncing that right why is it important to learn accounting for non accountants and i must admit this question got me wondering there are a few different ways you could go about tackling this one in the end i thought you guys might get the most value out of this.
You will able to handle lots of accounting issues by yourself and you should. Why?
If i talked about the ways in which an understanding of accounting can benefit the everyday person or non accountant going about their day-to-day lives So Bob I hope that is what you meant and if it is not then let me know in the comments below and I will see about making another blog I thought long and hard about this question and came up with three ways that learning accounting can benefit to know an accountant do not yet stick around to the end because I have saved the best till last the way It is not waste any more time why is it important to learn accounting for non accountants.
I am going to explain why now first of all I think It is important to remind ourselves what accounting actually is because it could be a bit of an alien concept to a non accounting as the systematic means of recording processing and summarizing financial transactions whew that s a mouthful yes it is but I am going to break it down for you accounting is a systematic process systematic means it needs to be done consistently on a regular basis It is a means of recording financial transactions this relates to noting down the key details of each and every financial transaction that affects a business.
It is also a way of processing that data that you have gathered by classifying those transactions into separate groups at related transactions and analyzing them in order to extract meaningful information from them the final step is summarizing that information by producing reports show your findings and providing them to the various stakeholders this could be your boss management the owners of your business shareholders or investors so that is what accounting is but what s the value of it to the everyday person going about their lives like you or me the first place that I think accounting comes in handy is when it comes to setting long term goals getting out of debt buying a car buying a house getting married starting a business saving up for your kids education and your own retirement the key part of accounting is forecasting that is where accountants look back at historical data and make estimates and predictions of where business will be in the future these predictions can include estimated sales what future expenses might be and what the cash position might look like these techniques can be applied in everyday life.
when it comes to setting the long-term goals because you will be able to put a value on the future cost of those goals and knowing your income and expenses you can create a savings plan in order to help you reach those goals and that brings me on to reason number two budgeting is where you set yourself short-term financial targets to help you achieve that savings plan that you created when setting those long-term goals you might want to think of long term goals of stuff you hope to achieve in 2 or 20 years