5 Accounting Principles Every Small Business Owner Should Know

Accounting is the systematic and detailed recording of financial transactions for a business. This activity is intended to provide information that allows owners and managers to make informed decisions about using company funds and resources.

Many types include accounting for large corporations, government agencies, forensic, auditing, and insurance. Accounting is essential for any industry or business.

If an individual runs a large corporation, small business, or family business, accounting records provide the next level in business information.

If the data at the next business level is incorrect, financial records can be manipulated and could lead to disastrous decisions.

Accounting is the second most widely used language in the world. Governments and banks use it around the globe and individuals to track the dollars they spend, the loans that they take out, and the profits they make.

What happens if there aren’t excellent accounting records?

Financial statements are vulnerable to fraud, errors, and omissions. This corporation will cease to be successful and may even stop trying to improve once the people within the company refuse to give proper thought and attention in looking more into and arranging the accounting records of their corporation.

There is nothing wrong if an entrepreneur wants to use traditional books and computerized accounting data as long as the records are accurate and recent–then everything will work out just fine. 

Today, most businesses use one type or another of accounting software to manage their finances and business records better.

An online small business accounting software can access accounting data online, print reports, or enter other applications.

The good news? This online accounting software can be used on all major platforms, including smartphones, tablets, PCs, laptops, and iPhones.

The infographic below explains the accounting principles small businesses need to know. It was created by KIPPIN, the best small business accounting software company: