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Understanding Money

rainmakershub April 26, 2022

Introduction – Financial Control for Non-Financial Business People

Accounting for your business involves the task of bookkeeping, and even if you are employing or outsourcing your bookkeeping to a third party, I maintain you still need to understand what is going on in your own business. Think of it this way if you do not understand the basics of financial recording and reporting, bookkeeping and how to read accounts, how will you ever know the job is being done well and correctly? This is your business and, therefore, your responsibility.

Bookkeeping refers to the detailed recording and reporting of economic activity and business transactions within your business. Accounting is a much broader term, including the design of the bookkeeping conventions used by your business and the detailed reporting required for compliance that we all need to be aware of. Accountants focus on preparing summaries of what has happened in your business rather than giving you all the detail transaction by transaction. These summaries are constructed from this detail, but for the most part, all you will want to see is in the overview. Should you need to dig deeper, that should be available through the records recorded by your bookkeeping function.

Financial Statements

These are prepared at the end of each financial period, a month, a quarter, multiple quarters or a year.