Did you know that the word 'accountability' derives from accounting?
Although finance and accounting may (for some) be quite daunting concepts to approach, it is important to understand basic financial management skills for business purposes.
A recent opinion article beautifully explains the origins and deemed importance of accounting in capitalist society from a historical point of view. For example, “In Renaissance Italy, merchants and property owners used accounting not only for their businesses but to make a moral reckoning with God, their cities, their countries, and their families.”
If your role requires you to oversee a budget, manage resource productivity, or create profitable products or services, then you should have a good level of financial understanding. If you can't navigate a P&L or a balance sheet, then you are likely to fall short of your role.
A basic understanding of some of the following concepts are in fact vital to business success:
-Learning how to read, understand and interpret financial statements is crucial to business fluidity, winning investors, ensuring the business is watertight, and managing risk.
-Furthermore, understanding basic accounting concepts, such as the relationship between profit and cash will enable sound business decisions, drive up performance and increase effectiveness.
We live in a society that has passed financial responsibility to the experts, disenfranchising the wider population of basic accounting and finance skills. This is quite a shift from the past as for instance in the 1500s in the Netherlands, most of the population knew how to do double-entry bookkeeping. In fact, “Not only did the Dutch have basic financial management skills, but they were also acutely aware of the concept of balanced books, audits, and reckonings. They had to be. If local water board administrators kept bad books, the Dutch dyke and canal system would not be well maintained, and the country risked catastrophic flooding.”
Perhaps it’s time to put double-entry bookkeeping back on the agenda if we want to be a part of an accountable society?
Financial Training Courses
If you want to boost your financial skills and enhance your performance, then enroll on one of our Finance Skills Training Courses. Our full day courses are guaranteed to give you confidence when interpreting balance sheets, P&Ls, forecasting and budgeting.
Whether you're in Poole, Bournemouth, Sherborne, Yeovil, Exeter or Bristol, we have trainers across the South West to deliver expert training onsite. We cover Devon, Dorset, Somerset and Cornwall.
Contact us to discuss further.