What is Small Business Accounting?
What is Small Business Accounting?
A Brief History of Small Business Accounting.
Ever since human beings first discovered their inherent proclivity towards capitalism, small business accounting came into being.
The abacus or a counting frame with rows of beads helped in this regard, but it was the Italian mathematician Luca Pacioli and his 1494 book, Summa de arithmetica, geometria, proportioni et propportionalita (Bet you can’t say that fast, three times in a row?) who gave shape to the modern double entry accounting system based on assets, liabilities, income and expenses.
Luca loved his ledger system and preached to the small business men of his day, the Venice Merchants, regarding the need for a balanced set of books. Luca kept excellent company, the artist friend who illustrated his accounting tome, was none other than Leonardo Da Vinci.
Small Business Accounting – A Successful Marriage
This relationship is a symbiotic one and is formed on the one hand by the small business owner and on the other, the accountant or less illustriously, the bean counter.
Yet, the very nature of business necessitates keeping track of inventory, costs and profits and then reporting on those findings. Tasks that most small business owners despise.
Small business accounting requires someone so driven by their need for precision and order, that they absolutely must “count the beans” to uncover the underlying details. As it turns out, pedantic accountants are exactly what small business owners need and want. It is the marriage between these two opposites which makes the American economy thrive.
The Small Business Owner – An American Artist
Their creative efforts form the backbone of America and the embodiment of the spirit of entrepreneurship which has fueled the greatness of this country.
The small business owner represents a rare slice of the American personality and is the unique vessel from which all genius, arduous work, perseverance, imagination, collective vision, and tensile strength required to run a business flow. Singlehandedly, they can take the glimmer of an idea, possibly nothing more than a crude outline on a paper napkin and an evening’s conversation and turn it into a living breathing economic entity. It’s an art form which is rarely noticed or applauded.
Navigating the Pitfalls, It Takes Small Business Accounting
It seems that even though small business owners have a great capacity to create business, it doesn’t necessarily mean they were born with an abacus in their hand or read Luca Pacioli’s book.
Keeping track of the financial side of a small business can be an overwhelming task, considering the record keeping, reporting, and obligations to employees, city, state and federal governments which are required. The skill set to track, manage and evaluate the path of a business is found under the protective umbrella of small business accounting.
These accounting professionals follow a strict code of accounting principles to ensure the economic success of the business.
Small Business Accounting – A Plan for Success
But there is more to it than just accounting principles and reports. For any marriage to prosper there must exist a chemistry between the participants and a commitment to work together. But there also needs to be a strategy, and a plan for success.
In the field of small business accounting, working with a business owner to develop those strategies is a vital part of their service. It all comes down to trust, and establishing a strong working relationship.
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