One of the most intimidating things about business for me is that the more I learn, the more I realize I may not know. It’s a tricky situation but it is a good thing to acknowledge that there are things that one does not know because, it allows a person room to grow with their business.

I was terrible with accounts back in school. The numbers confused me, they never balanced or behaved and I never understood the point of all those ledgers and books. To this day, I still cannot make sense of it all, the details that is. I am, however, fully aware of the importance of the process and some of the reasons why a business must have a reliable accounting system.

The most important reason for an accounting system is firstly to keep track of the development of the business. Accounting helps to justify expenses, predict profits and strategise certain activities that are important to the business. Keeping proper accounts creates a story that is told in numbers that increases the understanding of the business.

These same records are very useful when a business approaches a bank for a loan. They help the bank or any lending agency determine for themselves if providing the required funds is a risk or not. Accounts also help in keeping legal in terms of knowing what taxes to pay and keeping records of when exactly they were paid in compliance with government expectations.

Accounts are useful in identifying problems and solutions in a business. The numbers indicate the problem areas and help to guide the direction in which the business must go in order to achieve the goals set in the business plan. Accounts serve as vital statistics that give a better understanding of the state of the business in terms of the bigger picture and also in detail. It should be clear though that accounts are highly sensitive and most businesses do not allow access to their data.

It is now easier than ever to keep accounts. There are many financial applications that ease the process. From quickbooks to android and IOS applications accounting has become as simple as punching in numbers. For a business though because of the values of the statistics, it is best to have a reliable accountant review the numbers then advise the business on the best way forward. As always business it a complex and diverse subject but growing in knowledge one step at a time makes a big difference at the end of the day.