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Everyone should know accounting - and this is why! - Tutoring with Felicia

Happy Friday! You may either be excited or think I’m crazy by reading the title of this blog, but either way I hope you leave here having learned a little more about accounting and how useful it is. I know I used to be that person who had NO IDEA (seriously, no idea) about what accounting was, and then I found myself with a career in public accounting. Funny how life works sometimes… Anyway, here are my reasons for why everyone needs to know some basic accounting, and please reach out if you have any questions or plan on taking an accounting course and would like some help via tutoring!

1. Financial Statements tell you a lot about a company

Have you ever heard the word balance sheet or income statement (or statement of cash flows, or, we can't forget, the statement of shareholder's equity) and wondered what they really mean? These financial statements are the big picture of a company and can tell you where resources are being allocated, how profitable a company is, and even how fast product is moving. Being able to read a financial statement is helpful for investing opportunities and being able to have informative conversations about how the business is operating.

2. Basic accounting drives business decisions

Managerial accounting, another of the courses I tutor in, is about how to better manage a company and make informed business decisions based on financial information. You might have heard of the term break-even (where costs equal revenues) which is vital for a company to maintain or go beyond to stay afloat and continue its operations. It's important for a business (big or small) to understand what it will take for them to breakeven before even starting to sell or make their product. Without managerial accounting and an understanding "where the numbers go," a business is putting themselves in jeopardy of making bad decisions that could lead to ineffective outcomes.

3. Personal finances/bookkeeping!

Overall, understanding accounting can help you personally to see that your own finances can work as a business. We, just as businesses, are constantly deciding on what will provide the greatest reward in terms of investment, which ultimately is based on numbers and profit. Say you're thinking about buying a new car, would the better option be to lease, finance, or buy a used car? Many factors may come into play here, but probably the biggest one is your payment and how much money you'll be spending. Basic accounting (and of course sales techniques can't be overlooked, you know the car salesman doesn't start at the cheapest option for you) can help with this by understanding the value of the car now, and where you'll be when either your lease is up or you decide to sell the car.

As you can see, accounting is actually more than basic and helpful in many different ways! If you're in need of an accounting tutor (of course I had to bring this back to me!), please contact me via email (tutoringwithfelicia@gmail.com) or through filling out a contact form on my website. I hope you all have a fantastic weekend.

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