WHY ACCOUNTING RESULTS ARE GARBAGE

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ACCOUNTING IS NOT BORING

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accounting is one of the great inventions. it helps you keep track of your money or the money in your business. before there was accounting or double bookkeeping as it is sometimes called, there was just counting and keeping records

in accounting you always make two entries in your records and this will show you both:
  • how much money or goods you have
  • where the money or goods have come from (how much you received and spent)

this way you can analyze your affairs. you can check if you have made a profit or a loss. you can see how much debt you have. accounting enables financial management

at the same time the method of making two entries in the accounting records for every transaction makes it possible to easily check for mistakes. the mechanism that is used for this is called the accounting balance. if the accounts do not balance then there is something wrong and you have to go look for it

I can keep going on about this, but if you really want to learn about accounting the best way is to start doing it. it does not matter if you are not a trained accountant. as a private person or a small business owner you will anyway have the need to track your money. and you will do this with or without accounting. you will have some kind of method of counting and keeping records. in this case you could consider making a step towards accounting - like keeping a cash book

the benefits of accounting are listed above. you can improve your financial management. properly maintained accounting records are rock solid. you will have numbers that you can rely on and that you can use for making decisions, when filling your tax forms, dealing with your banker, or talking to your accountant

it is not all that easy though. accounting is like coding. there is a hard stretch you need to go to get into it. accounting is also 'GIGO - Garbage In, Garbage Out' that is any output is only going to be as good as the input, and you will need to work pretty hard at the input and setting up and configuring a system

GnuCash (https://www.gnucash.org/) is a good tool to get started if you want to give accounting a try yourself

like with coding, once you start getting results - you will appreciate the beauty and elegance of accounting as well as its functionality. it is not for nothing  that accounting has survived a few hundred years of big historical changes. it is good. it has proven to be adaptable. the tools have changed and so have the requirements. sure enough accounting cannot do everything, but it is good at what it does. businesses could not do without it



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