Why Is Accounting Important and What Is It, Anyway?
Accounting Articulation
Shelley Smith
MAN104
July 6, 2013
Instructor Natalie Rufa
Accounting Articulation
“You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language…”
– Warren Buffett lan·guage [lang-gwij] noun
… any set or system of such symbols as used in a more or less uniform fashion by a number of people, who are thus enabled to communicate intelligibly with one another.
If we use this analogy, that accounting is a way to articulate the health and vitality of a business enterprise; then it becomes clear that it is a vital component of any entrepreneur’s skills. When we try to learn a new language, we do so by mimicking others with more knowledge; in business, this would be the equivalent of engaging an accountant or accounting firm. While it is critical to trust such an individual or company, it would be important to have a core understanding of this language by seeking other, external education as well. Even just a rudimentary grasp of the concepts will suffice so long as a business owner engages a more highly qualified team or accountant to handle the fine tuning and details of the necessary financial reports and statements. To clarify, business owners need to be aware of how accounting systems work so that they can realize when their ventures are successful or in danger of failing and to recognize if there are any errors on the part of the bookkeeper.
As a business is engaged and functional, there will be times when it becomes necessary to relay certain key pieces of information in a manner that will be acceptable, justifiable, and logical for others to interpret. Some of those outside agencies would include tax authorities, lenders, prospective clients or investors, and even customers. In order to effectively converse or share that data, it would need to be easily translated; thus a systemized or standardized accounting methodology would
Shelley Smith
MAN104
July 6, 2013
Instructor Natalie Rufa
Accounting Articulation
“You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language…”
– Warren Buffett lan·guage [lang-gwij] noun
… any set or system of such symbols as used in a more or less uniform fashion by a number of people, who are thus enabled to communicate intelligibly with one another.
If we use this analogy, that accounting is a way to articulate the health and vitality of a business enterprise; then it becomes clear that it is a vital component of any entrepreneur’s skills. When we try to learn a new language, we do so by mimicking others with more knowledge; in business, this would be the equivalent of engaging an accountant or accounting firm. While it is critical to trust such an individual or company, it would be important to have a core understanding of this language by seeking other, external education as well. Even just a rudimentary grasp of the concepts will suffice so long as a business owner engages a more highly qualified team or accountant to handle the fine tuning and details of the necessary financial reports and statements. To clarify, business owners need to be aware of how accounting systems work so that they can realize when their ventures are successful or in danger of failing and to recognize if there are any errors on the part of the bookkeeper.
As a business is engaged and functional, there will be times when it becomes necessary to relay certain key pieces of information in a manner that will be acceptable, justifiable, and logical for others to interpret. Some of those outside agencies would include tax authorities, lenders, prospective clients or investors, and even customers. In order to effectively converse or share that data, it would need to be easily translated; thus a systemized or standardized accounting methodology would
References: Buffet, W. (n.d.) 4 Notable Quotes On the Value of Accounting Knowledge from the World’s Richest and Influential People. Retrieved from website http://www.principlesofaccounts.com.sg/4-notable-quotes-on-the-value-of-accounting-knowledge-from-the-worlds-richest-and-influential-people/ Definition retrieved from website http://dictionary.reference.com/browse/language?s=t Vitez, O. (n.d.) Principles and Importance of Accounting for a Business. Chron.com. Retrieved from website http://smallbusiness.chron.com/principles-importance-accounting-business-703.html