Learning the fundamentals of accounting is like learning a new language. Becoming "literate" in accounting doesn't take quite as long as learning Russian, Spanish, or Chinese, but the advantages are indeed comparable.
It's safe to say that many people fear numbers - "I was terrible at math in school!" - so the word "accounting" calls up, for many, memories of days spent struggling over high school algebra. They prefer to leave the accounting to those who hang a CPA shingle outside their door, confident that the professionals will do a much better job of managing their money.
But the fact remains that everyone should have a little accounting knowledge and, truly, the math involved isn't all that difficult. Nonetheless, knowing the basics, from how to balance your checkbook to learning to keep good financial records for tax purposes, can go a long way, whether you're a small business owner, investor, manager, lender, or just in charge of the household finances.
Having a clear knowledge of your business's financial life is important. No one should be in the dark about their overall financial picture. That's a disaster waiting to happen. However, with a perfunctory knowledge of basic accounting principles, including assets and liabilities, creating financial statements, budgeting, and more, you'll be on the road to healthier relationship with your money.
